The stock market’s technical “topping formation” finally manifested in a correction in early May, and it resumed over the past several days. The 20-day moving average that had provided consistent support during the methodical rally has proven to be formidable resistance (along with the converging 50-day).

Confusion continues to reign across the global marketplace. If there's no safe place to invest, does that mean you should invest nowhere? Or should you invest where it's relatively safe?

To put things into perspective, let's start with the backdrop to last week's market behavior.

It was a wild ride last week and perhaps the worst week the markets have seen since we began publishing this newsletter in 2004.  But today the bulls stampeded and the shorts ran for cover as the S&P 500 gained +4.4% for the day!

As earnings season gets underway with mixed results but a generally positive trend, Wall Street analysts are coming out with upgrades and downgrades to earnings estimates that are significantly impacting our sector rankings this week.

This week’s economic calendar features two bellwethers of consumer confidence (one on Tuesday and one on Friday), the FOMC announcement on interest rates on Wednesday, the weekly jobless claims on Thursday, and the quarterly GDP growth rate on Friday.  But it is unlikely that these numbers will have much of an impact on the market this week.

This week should be another interesting one, but it’s hard to say whether it can match the market’s behavior last week when it donned rose-colored glasses to view four days of mixed economic data.