Summary

The major stock indices continue to consolidate; call it taking a rest, moving sideways, or doing nothing. But it seems the risk-on trade has run out of gas in the near-term and the risk-off trade has come back to life. As we often say, as long as the money rotates to different sectors and industries and stays in equities, the market should be fine. When funds leave the market and head to other assets (the bond market, money markets, commodities, etc.), stocks have a problem. We do not want the risk-off trade to last too long, as that would signal embedded worries about the economy and growth drivers, but a "rest" will give the powerhouse components of the indices a chance to cool before the next major market advance begins. Over the past four days, the largest sector gainers have been in Healthcare (+4.6%), Utilities (+4.4%), and Consumer Staples (+3.9%). During the period, Information Technology, Consumer Discretionary, and Communication Services have done little. We also point out that the stocks that have done the best of late come from the beaten-up Healthcare sector, as well as the most beaten-down issues. Some of the biggest gainers on Tuesday have the weakest relative-stren