All week long it seemed as if most market participants sat idle awaiting a market crash. Despite the slow fade and mixed close on the week for the averages, the crash didn't come and many participants missed out on some solid action in select areas.

 

We again make reference to the light volume pull back in the Nasdaq as a potential set up for a coming pop. Furthermore the basing action near highs in the S&P and Dow has us encouraged and the new closing high in the Russell 2000 should attract some attention.

 

We have made mention all week that the longer the market could remain intact, the weaker the bearish argument became. We feel that despite the flat action overall, this week was a win for the bulls and may set us up for the snap higher we've been looking for.  The longer the bears go without being rewarded the more likely they will be quick to throw in the towel if the market moves against them.

 

We continue to believe a rotation is taking place and the areas that look to be perking up are the financials and biotechs. The semiconductors closed slightly below major resistance and we still think there is a good chance that the group may be putting in a bottom.

 

Despite the occasional earnings blow up, we had a good week at Shark HQ but don't anticipate foregoing our defense and throwing caution to the wind. Well be working overtime this weekend reviewing the charts and looking for any hints as to where the action may lead us on Monday. 

 

Have a good evening.