Today’s action was lethargic and poor which capped off a week full of suspicious activity. Oil continued to sell off today, however this brought no life to sectors we would like to see lead a market. Gold and Drugs finished as the market leaders today, defensive sectors we don’t like to see, however the banks showed some resiliency, at least one positive for the bulls.

We can’t pin point the action this week as we have variables such as index rebalancing and options expiration to contend with, however the poor action in small caps and a lagging Nasdaq definitely raises our caution level.

While the media seems to be fixated on the possibilities of Dow 11,000 we’re more concerned with the internals and the real health of the market. When we see negative action in sectors that should be leading and bids disappearing for the small cap stocks we favor one must start to take notice. At this point the market technicals are still in good shape. The S&P 500 and Nasdaq seem to be basing near highs, and the Dow has been showing strength, also approaching highs. Until this technical picture changes we aren’t ready to throw in the towel just yet.

While we can’t pin point to a specific indicator or variable, we still can’t shake a gut feeling that we could possibly see some strong action within the next two weeks. It feels as if many are calling it a year and we are starting to hear the grumbles of frustrated and bored market participants. Christmas is still a week away, and while your schedules may be filled with last minute shopping and fire side chats, make sure to review the list as it still may prove worthwhile to have a plan should Mr. Market show up for a little last minute soiree.  

Have a good evening.