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Tug-of-War

|Includes:GS, HAS, HSH, MA, Altria Group, Inc. (MO), MON, PEP



Another round of Distribution on the Dow and S&P 500 for Tuesday reinforces our Sell Bias.

Next stop to the downside for the indexes appears to be the 200-day moving averages, beyond that, the lows made two weeks ago during the "flash crash."

We've been on the watch for a breakdown on the Broker Dealer Index ($XBD), which is on the verge of falling below a nearly yearlong trading range.



Any high volume move with a close below this range won't bode well for the rest of the market as Broker Dealers have historically served as part of the backbone to broader trends.

Heavy selling in shares of Semiconductor companies is also weighing to the Bears advantage.

Though not all is broken, yet, as the Semiconductor Index ($SOX) and Retail Index ($RLX), two other key components of the broader market trend, trade above their 200-day moving averages.



As these sectors play out their tug-of-war we see similar split personalities with individual stocks in the S&P 100, with some holding new highs and others breaking down.

Bulls can take confidence with recent highs from Hasbro (NASDAQ:HAS), Altria (NYSE:MO), Pepsico (NYSE:PEP) and Sara Lee (SLE). For Bears, it's the breakdowns of MasterCard (NYSE:MA), Goldman Sachs (NYSE:GS) and Monsanto (NYSE:MON) that endorse their forecasts.

Disclosure: Short: DIA, CMC, DRIV, TEX
Stocks: MO, HSH, HAS, PEP, MA, MON, GS