MARKET SHRUGS OFF BAD NEWS -- BOND YIELDS AND DOLLAR DROP -- COMMODITIES AND FOREIGN ETFS GAIN -- JAPAN IS TOP PERFORMER -- CONSUMER STAPLES AND HEALTHCARE SHOW NEW LEADERSHIP -- WELLPOINT BREAKS OUT

WEEKLY WRAPUP ... The market shrugged off some bad news on Friday from Microsoft and the housing sector to end either flat or modestly higher. That's actually a pretty good performance. Bond yields and the dollar continued to weaken which boosted commodities (especially gold and oil) and foreign ETFs. Japan iShares were the top ETF of the week. Sector leaders for the week were basic materials, transports, consumer staples, and technology. Paper stocks (International Paper and Temple Inland) continued to play catchup to aluminum, chemicals, and steel. Food and beverage stocks are leading a resurgence in consumer staples. Campbell Soup and Tyson foods were two of the top food stocks in the group. Qualcomm, Yahoo, Adobe, and Applied Materials led a rebounding technology sector. The only minor change that I detected was new interest in consumer staples, which is generally considered to be a more defensive sector. That may be a normal reaction to signs of a slowing economy. Health care, which is another defensive group, is the top sector in 2007. The weekly bars in Chart 1 show Wellpoint Health Networks breaking out to a new record high over the last two weeks. Its relative strength ratio (blue line) has been rising for the last three months. That may be an indication of new interest in the group. [I hope to post charts to go along with the preceding commments before the weekend is out -- probably on Monday. Enjoy the long weekend].

Chart 1

LOOK FOR CHARTS BEFORE WEEKEND IS OUT ...