Going long? If so, focus only on these sectors…

In spite of all the damage that has been done in individual areas…In spite
of the RETAILERS doing a bungee jump…In spite of the awful action in the
FINANCIALS…In spite of all the individual stocks and sectors that have
broken down…In spite of the BIOTECHS now rolling over…In spite of the
SEMICONDUCTORS now starting to roll over, MAJOR INDICES ARE STILL ONLY A
STONE’S THROW AWAY FROM RECENT HIGHS. I really don’t know what is holding up
the major indices. I gather it is the commodity areas doing the job…But the
fact is, major indices have not budged. For sure, they have pulled back and
are now trading below shorter-term moving averages…but they still refuse to
budge to the downside in a meaningful way. Until the important areas of
support give way, they get the benefit of the doubt.

Other positives:

Every time the market does get into trouble, the bears come out in droves.
Sentiment turns very bearish…very quickly.

WORLD MARKETS continue to roll. JAPAN continues to hit new highs. CANADA, RUSSIA, ASIA, EUROPE all continue to act well…and refuse to pull back in a
meaningful. As I have told you, normally, our markets are led or are
coincident with major markets around the world. Keep in mind, the U.S. market
continues to lag world markets at this point.

BROKERAGE stocks continue to act well. It is not very often markets get into
real trouble when the BROKERS  are working.

COMMODITY areas are still in gear.

UTILITIES refuse to buckle. In the past, UTILITIES have also been a good
indicator for the market.