Stock Market Comment

Fundamental
The weekly cyclical fundamental market indicator remains in a firm uptrend off the 8/30/10
interim low and has been moving up faster than the SP 500. This result is partly a consequence
of investor preference for mid and smaller cap stocks as well as for selected foreign markets.
As well, investor confidence is lagging some, reflecting, I think, concerns about the weaker
credits in the EU and continued firming of China's monetary policy. On a weekly basis, the
correlation of the SP 500 to the cyclical indicator has dropped from +.7 down to +.64.

Technical
The market did break above resistance as the week wore on. We have new cyclical highs and
confirmation that the second upleg of this cyclical bull is intact. The shorter term uptrend has
been re-established, and I have the market as still mildly overbought.

SP 500 short term chart.