The highest scoring names in large cap from 1 year ago (1/8/2013) returned 909 bps more than the S&P 500.  The best performers have been YHOO up 104%, CREE up 99%, BSX up 95%, GILD up 92%, ITT up 79%, and TMO up 69%.

• The top large cap sector is industrial goods
• The best large cap industry is lodging.

The average score across large cap is 67.27 this week, below the four week moving average score of 69.99.  The average large cap is trading 5.58% above its 200 dma, has 4.18 days to cover short and is expected to post EPS growth of 12.7% next year.

Industrials, healthcare, and services score above average.  Financials score in line.  Consumer goods, technology, basics, and utilities score below average.
 

Commentary:
 

Lodging (H, MAR, HOT) is the best scoring large cap industry.  Boeing's order over the weekend adds additional conviction to aerospace/defense (BA, NOC, RTN, LMT, HON).  Defense companies benefit from non-sequestration budget resolution and overseas sales.  Flu season is ramping up -- bullish for drug stores (CVS, WAG), which offer robust seasonality through winter.  Watch margin in 2014 as a re-acceleration of the patent cliff provides pharmacies with generic margin upside.  Europe's nascent recovery offers un-modeled upside for industrials, including diversified machinery (ITT, FLS, IR) -- position accordingly.

The only industry scoring above average in basics is ag chemicals (MON, CF, DD).   Farmers were able to carry forward prior drought year fertilizer applications last year, however will return to the market this season.  In consumer, buy major food (MDLZ, ADM), textiles (VFC, NKE) and cigarettes (LO).  Cotton prices provide margin support for textiles plays while solid retail apparel sales provide inventory turn.   Asset managers (AMP, TROW, BEN), credit services (MCO, DFS, AXP), and life insurers (LNC, PRU, MFC) score best in financials.  Look for easing credit standards to support growth for credit card issuers in 2014.  Buy medical appliances (STJ, ZMH, MDT), medical instruments (BDX, BCR), and biotechnology (CELG, BIIB, GILD) in healthcare.  Post-reform enrollment and job growth offers demand upside.  In biotech, watch for label expansion opportunities and margin expansion tied to orphan drug approvals.  Every industrial goods basket is above average focus on aerospace/defense and diversified machinery.  Lodging is best in services.  Business travel supports room rates.  New capacity leveraged against rising revPAR will drive profit growth this year.  Drug stores and railroads (CSX, NSC, UNP) also score highly.  Look for rails to leverage improving grain and coal volume for railcar pricing.  In technology, concentrate on business software (DOX, CTSH), communication equipment (GLW, DTV, QCOM), and technical & system software (INFY).