While it was very subtle, the divergence we have been writing about narrowed a bit today as the NASDAQ gained ground while the Dow fell slightly lower. After a late day reversal in Gold, leadership transferred to the semiconductors however the .37% advance was less than exciting. Oil fell over 2% giving even more conviction to our thesis of a rotation taking place and hot money looking for a home. Breadth was mixed with the NYSE ending negative and the NASDAQ slightly positive. As we expected the small cap index took a breather and while we remain short this sector some basing new highs may bode well for another leg up.

While the action was very mundane, we remained active today tweaking and prodding the portfolio with some minor moves. We haven't made any grandiose changes but simply took some profits here and there and cutting laggards.
 

We continue to remain focused on what is in front of us and at this point we continue to like what we're seeing. It's only Monday but a continuation of the recent choppiness is already making it feel like a long week. With that said, Mr. Market has a way of sneaking up on you when you lose your edge so be prepared and don't lose your focus.

Have a good evening.

RevShark