SPX-- Daily Chart

the SP 500 is up about 1.5% for the YTD. Resistance in this slow moving market has moved
from SPX 1850 up to 1880. Realistically, for the short term the market is essentially trendless
and adrift. There is a wide-band uptrend in place since the end of Jun. 13, and in the past few
weeks,the SPX has been operating in the lower portion of that band as momentum has faded.
The 25 day m/a is flattening out and MACD and RSI trends are drifting lower. Even breadth
has begun to flatten out. SPX Daily Chart

But, despite this weak internal showing, the market remains in an upwave dating back first
to late 2012 and before that to the latter part of 2011. It is the third leg - up to a cyclical bull
which started in Mar. 2009.

With the Fed's QE tapering program well underway, the QE momentum players are cashing in  
and have been hitting the momentum stocks like the dot.coms very hard. Many investors are
now hedging on a positive fundamental environment by rotating into more defensive areas.
One popular move is to "hide cash" by moving into utility stocks as a defensive tactic at
a time when bond yields have been falling and power output has been seasonally strong.
(The bottom panel of the chart shows the strength of the SP 500 relative to the utilities.)
Some of this defensive behavior no doubt is due to the severe winter experienced in the US
but likely also reflects degrees of investor concern over how well the economy will do as
the QE program is wound down to zero.  Keep in mind that this unique experiment is being conducted with a p/e multiple on the SPX of over 17x. Remarkable confidence is being
shown when you consider we are working with theory and not tried and true rote.