Markets sold off to start the week and the Nasdaq demonstrated its leading form dropping “only” .3% half of what the S&P 500 fell today. It recovered 37 handles from its session low and finished near the top of its daily range. The S&P 500 closed lower for 7 of the last 8 days and seemed to catch a bid at its 50 day SMA. There does seem to be a bit of ambivalence regarding the markets currently. Everyone is making a big fuss about the weak benchmarks but in reality the Nasdaq and S&P 500 are holding up decently. The Nasdaq is off less than 1% from its recent 52 week high, while the S&P the obvious weaker of the two is off almost 3% from its own. On the other hand the utilities and defensive groups have been lagging like you would want them too. Remembers utilities led from January to the end of April judging by the XLU barely recorded a down day. Other defensive names have under performed like CLX CPB KMB PG. While most industrial and economically sensitive stocks have started to show strengthening qualities, others are lagging and may be foreshadowing something. An IP comes to mind in a correction now and lower 9 of the last 10 days when just a couple weeks ago looked like it was going to bust through the round 50 handle. RKT flirting with bear market thresholds is another idea of a name quickly gone sour. Just a couple weeks ago it was rejoicing in all time high territory, although today’s action looked similar to capitulation bouncing off its 200 day SMA. Are these isolated incidents or “canaries in the cold mines?”

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