Futures weakened a bit before the market open and even after the open, despite a strong move up by the S&P 500 and DJIA there was notable weakness in the small and mid cap indexes/ETFs. Recall small caps were the leaders of this move up the past few months – they are an important canary in the coal mine to watch. Also please note some of the old leadership groups like housing have been lost.
Financials had taken the reign as the "go to" sector of late so that is the next group to watch. As for the greater S&P 500 the bears want to see today's lack of new high mean the right shoulder of a bearish head and shoulders formation is in the early stages. I outlined this in reddish boxes below. As for news flow comments are this is due to the Italian markets reversing on Berlusconi the comeback kid making some gains in a coalition in their Senate - but when the market wants to rally (or selloff) it will find a convenient reasons no matter the news flow.
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