We came upon this sight while hiking after some heavy rains in Southern Utah. A captivating paradox where mud looks tasty enough to eat.

After a long weekend and a plethora of articles written with the theme, “What Brexit?”, the market opened lower. It then proceeded to work its way even lower most of the session.

However, the decline seemed relatively shallow given the five days of rally that preceded today. That begs the question, does the market look like mud or chocolate frosted cake?

Naturally, it pays to examine the Family, that is the Modern Family. The Family we’ve anointed made up of one index, The Russell 2000 and 5 Sectors-Retail, Transportation, Biotechnology, Regional Banks and Semiconductors.

Over the weekend, we had concerns about the market underachievers and how they would fare this week.

For example, we urged you to not ignore the Financial ETFs, Regional Banks (KRE) and XLF. KRE spelled trouble under the 200 week moving average. Opening under that key moving average, KRE closed the weakest of all the major sectors and groups or down nearly 3%.

Sometimes a good roll in the mud though, can leave your skin looking like you just had some healthy exfoliation. But you must get the mud washed off quickly or it will dry out and crack your skin.

Our Granddad Russell 2000, which ended last week back in a Bullish Phase, managed to hang onto the 50 daily moving average. That kept it in a bullish phase. If you hope to lick the mixing spoon, it’s this index that gives you the best chance for a sweet taste.

Besides the Russell’s, Semiconductors are holding above the 50 DMA making these potentially chocolate sprinkles. Semi’s have acted well all along. Even after the initial Brexit crash, SMH held tight onto the 200 daily moving average.

Retail trades more like mud pie. However, with enough sugar that could change. And Transportation is like butter. Too little and even the best Fudge Cake is dry and tasteless. Yet with the right amount of butter, a fudge cake will delight even the most discerning palate.

Since speculative money did return through the move up in Biotechnology last week, we will watch here for even more interest to emerge. A potential move back over the 50 daily moving average will improve the phase to Recovery.

Bakers will tell you that the biggest difference between a good cake and a mud pie is the amount of yeast. In the case of Biotech, too little yeast and the cake will turn to mud. Too much yeast and the cake will rise unsubstantially fast. Just enough yeast, and we might just have our cake and eat it too.

S&P 500 (SPY) 207.70 is the pivotal 50 DMA where it stopped perfectly at today. 210.87 the pre-Brexit high

Russell 2000 (IWM) 116 important level to clear on several time frames. 113.35 the 50 DMA support to hold

Dow (DIA) 179.83 the pre-Brexit high. 177.40 underlying support

Nasdaq (QQQ) 107.44-107.66 is where the moving average support it. Held it on the close. As weakest index, it must clear pre-Brexit high of 108.79

Volatility Index (VIX)

XLF (Financials) Not a good day but not irreparable if gets back over 23.00

KRE (Regional Banks) The open under 37.50 gave you a good low risk short for an active trade. Now, see if it can get back over 37.65

SMH (Semiconductors) 55.00 key support

IYT (Transportation) 132.90 key support on a weekly basis

IBB (Biotechnology) 255 support. Inside day. Over 265.75 better

XRT (Retail) 42.27 the 50 DMA to get back over for this to be good

IYR (Real Estate) Another new 2016 high-rates of course, but still-REITs buying

ITB (US Home Construction) Through 28 good

GLD (Gold Trust) See no real resistance until 132. Support 125.90

SLV (Silver) 19.35 the 200 Week Moving Average

GDX (Gold Miners) 31.35 the last swing high in August 2013. 28 support now

USO (US Oil Fund) 11.00 support to hold if this has a chance to get back above 11.60. Subscribers: Slope on the 50 WMA returned negative

OIH (Oil Services) We got the dip to below 29.00. Now, needs to hold around 28.50 t stay bullish

UNG (US NatGas Fund) Big drop from the 50 WMA. Now, has to hold today’s lows

TAN (Guggenheim Solar Energy) 20.00 key support

TLT (iShares 20+ Year Treasuries) Bubble watch

UUP (Dollar Bull) 25.05 the 200 DMA resistance. 24.70 support