Lower Tops

As Bull Markets mature, leadership narrows. What this means is that parts of the market top before others and those which top end up in a series of lower highs and lows, while the markets put in higher highs and lows.

First, I want to show the areas that are failing. The first to top tend to be the ones that get hit hardest in the next Bear Market. The first to top in 2006 were the Real Estate Finance companies and the Home Builders.

Healthcare


Utilities


Energy



Taiwan


The UK



Microsoft
That is one potentially huge top. The 38.2% retracement level (MSFT $24.90) has held and this retest of it needs to hold over the next few days, or else a large component of the S&P 500, DJIA and NASDAQ is going to be working against the market.


Others include Austria (EWO – the proxy for Eastern Europe), Australia (EWA), Netherlands (EWN), Global 100 (IOO), American Express (AXP), Mastercard (MA), Visa (V), Alcoa (AA), 3M (MMM), Chevron (CVX), Exxon (XOM), JNJ, Merck (MRK), AT&T (T)