Items of Interest:

• U.S. Markets

  • The S&P 500 has shown a loss of upside momentum with its last drive higher off the early November low.  There is no sign of a top formation, which leads us to believe we could see a sideways range unfolding.  The Mid Cap (MDY) and Russell 2000 have been pausing from their target zones and are also poised for consolidation.
  • On page 7, we score and rank the 11 S&P sector ETFs.  The top 3 sectors are the XLC, XLF, and XLY.  We see recent deterioration in all of the others, with the SOXX and XLV having the largest one month change in their scores.
  • In Europe, the FTSE MIB has been in a consolidation pattern for most of the year.  The DAX has had the strongest upside momentum recently as the CAC and Swiss (SMI) remain in a weak position.
  • The Nikkei on page 15 is in a multi-month consolidation and an index to monitor for a directional breakout, either up or down, as it approaches the apex of its pattern.
  • The MSCI All Country World Index (ACWI) on page 18 is in a well-defined bullish uptrend. The index is made up of 3,000 companies from 23 developed countries and 24 emerging markets.