Today was one of those days that you shouldn’t over analyze or draw any strong conclusions from in trying to determine the market’s next major move, but there are some noteworthy patterns developing.

It was a relatively quiet day without any remarkable conviction in either direction. This is most evident by the fact that the QQQ closed marginally up, the SPY closed marginally down, and the IWM closed solidly in the red and at a 5-day closing low.

However, there are 2 noteworthy patterns in the relative movements of the market indexes and sectors.

The first pattern is a theme we’ve been highlighting recently which is that the leaders continue to climb while the laggards continue to fall. This was the case again today in our sector table with the best 6-month performing sector (SMH) having the best up performance today. Meanwhile the second to weakest sector (XLE) had the worst performance today.

Of course the same theme played out between the QQQ which led higher, and the IWM which fell the most.

The second pattern shines a little more insight into the potential direction of the market...

The second pattern is one of the market showing signs of getting tired. While any of these points considered alone would not be all that significant, together they are worth noting…

1. A quick glance it looks as if today was the first start of the week in about 2 months that was not up in the SPY. Maybe it’s because of the holiday? Maybe there’s more to it.
2. The TLT closed at the highest level in over a month and over the big level of 124. It’s only done that one other time this year. This could be viewed as the market getting cautious on stocks. It’s also being highlighted in the media a ‘curve flattening’ which is not positive for stocks either.
3. Nasdaq and NYSE both had an increase in the number of new 52-week lows and a decrease in the number of new highs.

On the whole, the market got off to a soft and cautious start to the week. The most notable things to watch out for to get a quick heads up that “soft” may turn into a “bear” would be the IWM heading lower, TLT rising, and QQQ closing below a prior day’s low.

The QQQ, by the way, has only closed under its prior day’s low twice since it bounced off its 50-day moving average on April 17th.

S&P 500 (SPY) Todays range contained within inside day pattern. Overhead resistance is the 242.08 high from Thursday. First support is still 240.70 then 240, then 236.50 before you get to the weekly low of 235.40 If that breaks watch out below with light support at 233.50 and then 225.

Russell 2000 (IWM) Sloppy action and weak relative performance yet again and back into unconfirmed warning phase. Much more below these levels could drag rest of market down support a 200 DMA at 131.65. Move above 138 would get things back on track for bulls

Dow (DIA) Tight indecisive price action with three doji days in a row. A close over ATH at 211 would confirm upside. 205.85 is still the weekly support and if that breaks then it should find support around 204. If it breaks 204 the next support level is 194 on monthly charts

Nasdaq (QQQ) Yet another all -time high close but strong momentum on pause. Use Open Range Reversal strategy to buy weakness above S1 at 141.15 level. After that Important support at 139.20 and 10 DMA.  If broken look for next support at 134.75

KRE (Regional Banks) Weak again as This sector is still in trouble in a bear phase There’s a lot of resistance at 54-55. The big support to hold is 51.50 and then 50.85 at 200 DMA. Big pictures show head and shoulders top forming

SMH (Semiconductors) THIS SECTOR IS ON FIRE. Made yet another new high but hard to chase. If day or mini-swing buy on weakness with tight stops below 85.40. Should find support at 84.40 and S3 on a sell off.

IYT (Transportation) On Pause but looking good after nice run-up last week. 166.10 breakout level Needs to hold 164.50 for short term and now 158 for swing to position trades where 200 DMA

IBB (Biotechnology) Broke below 6-month calendar range and hanging onto 200-day MA and 200-week MA. Can sell weakness below 200 day at 284 with stop above 289

XRT (Retail) Retail stocks remain under pressure.  It needs a flush and reversal pattern to think about any serious long play. Or a move above 41 for a pop maybe to 42-43 for day-traders.Long-term pattern on weekly charts looks heavy with support at 38 at 80 month moving average.

IYR (Real Estate) Sloppy action caught in crosstown traffic sitting on 50 DMA… W

XLU: This leading sector and flight to safety play outperformed SPY yet again. Important support at 52.20 with near term support at 52.90.

GLD (Gold Trust) Pause after breakout above our number of 120. Will look interesting if it breaks 120.79. Should find support at 119.40. Breakdown and close under low at 118.50 could mean a lot more pressure to downside to follow.

SLV (Silver) Breakout above 1 and 6-month calendar range highs holding and nice relative strength. A move above 16.50 should lead to a nice pop and clearing 16.75-80 would clear 200 DMA and bode well for further even bigger gains

GDX (Gold Miners) Still waiting for a break over the 200 DMA and 6-month calendar range of 23.90 to get long. A break below 21 could get ugly to downside