Markets showed some resilience Tuesday as they fought off some late morning weakness. Even the Nasdaq was able to advance today in spite of AAPL’s 8% drop. AAPL is the Nasdaq’s largest component comprising almost 7% on the index. It had been sporting a 575.24 flat base trigger which obviously was not taken out and it did find support, not surprisingly, at the round 500 handle. Today marked the third consecutive day of Nasdaq not keeping pace with the S&P 500. As the leading index for 2013 is this something to be concerned about, or is it healthy rotation? The Nasdaq did manage to find 50 day support today although the 14 handle advance, after the last 3 days 158 handle decline needs more follow through. Breadth seems to be worrisome too, and even new 52 week highs versus lows are sliding on a daily basis. Yesterday for example new lows outnumbered new 52 week highs on the NYSE by a 66 to 22 margin. On the Nasdaq the tally was a little better with 44 new 52 week highs against 37 new 52 week lows. If the market rally resumes keep an eye on some groups that have been receiving some rotation. They include semiconductors and homebuilders. The latter got a boost from some nice data premarket regarding home prices rising handsomely. DHI flew higher by 10% Tuesday after receiving precise 50 day SMA support Monday reversing to finish higher showing good relative strength. It had the look of a bullish cup with handle breakout today, except that the handle was in the lower half of the base making it faulty prone. Wait for a cup or cup with handle base to develop.

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