Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Decisive Moment As Bulls Attack Broad Market Resistance Levels

The stock market correction that began in the first week of August is now more than one month long, roughly the same length as the correction that began in late March and the one that began in late May. With global equities moving higher, this could be the last stand for the bears if the bulls are able to break through broad market resistance and resume the 2013 rally.

The line in the sand is 1690 on the S&P 500 Index. The index will need to set a new high to mark a new rally, but getting through 1690 will be the hard part. The first marker is the 1660 level, which is within sight of from Wednesday's close.

The best sign for the bulls is the recent strength in Internet, biotechnology and solar stocks. These sectors have rallied strongly in the past few trading sessions, with solar shares up sharply, and they are all momentum leaders. When the bulls are in charge, the momentum leaders always lead the market higher - except for when there are changes in leadership. Currently, the only sector showing a major bullish momentum move is energy, which is being helped by questions over U.S. involvement in Syria.

One sector is also showing signs of a reversal: semiconductors. Technology has been relatively strong overall, with pockets of strength in Internet and networking shares, but semiconductors appeared to be breaking down in August. Today, the outlook is a little more bullish and should continue turning bullish if the bulls are able to push through resistance and set the broader market back on an uptrend.

There are still lagging sectors though. Real estate has failed to rally and will likely test its 2013 lows before we see a bounce. The chart of many real estate shares looks like an inverse of the 10-year Treasury yield, which itself is bouncing against upper resistance levels. If the 10-year can break out, it will probably run above 3 percent, and housing and real estate will begin their next leg lower, irrespective of how the broader market performs.

Two other potentially weak sectors are utilities and consumer staples. Utilities are interest rate sensitive due to huge amounts of debt, along with relatively high yields that attract income investors. When rates are falling, utility yields are attractive to investors and falling rates boost utilities income, allowing for faster dividend increases. When rates rise, this works in reverse, slowing the profit and dividend growth of the sector. Consumer staples have become a crowded trade, with many income investors in search of dividends, and a move lower in the broader market will involve staples becoming less crowded.

Biotech and solar shares are on the cusp of breaking to new 52-week highs, along with 10-year bond rates. Housing and real estate are on the verge of falling to 2013 lows, with 52-week lows not far behind. If rates and stocks rise, we could see new highs and new lows simultaneously in various sectors, but more likely, something has to give. Right now the bulls have a slight advantage, let's see if they can make it into something more.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.