Stock investors are protecting gains and holding off on deploying cash as concerns abound about central banks, including the Federal Reserve, tapering off on their stimulus programs, i.e., money printing. Low-interest policies and quantitative easing have been the driving force for economic recovery while pushing return-hungry investors into equities by default. Read more about Sector Detector: Patient bulls are getting their buyng opportunity

Stocks finished the month of April breaking to new highs, with the S&P 500 rising above 1597. But May Day selling put a temporary hold on the bullish celebration that will certainly occur if the S&P 500 can make a clean break above psychological resistance at 1600. Was May Day the start of the usual “Sell in May and go away” practice? Read more about Sector Detector: Knock, knock, knocking on new highs … but running on fumes

“All generalizations are false, including this one.” -- Mark Twain

For those investors who may have been feeling a tad complacent due to the recent record highs of several of the major indices, last week probably served as a reminder that high volatility is always just a shout away from knocking the market down a notch or three. Read more about ETF Periscope: Is “Sell In May” Already Circled On Wall Street’s Calendar?

The Dow Jones Transportation Index is up an impressive +16.7% year-to-date through Wednesday, as it runs interference for the broader Dow Industrials (up +10.8%) and tries to prod the bulls ahead. Read more about Sector Detector: Transports try to prod bulls through tough resistance

The week started out well as insured depositors were spared in Cyprus, and that resonated well with investors.  Furthermore, last week’s domestic economic data was quite positive especially for housing.  The Philadelphia Fed Survey was much better than expected; Initial Jobless Claims remained in the low 300K area; and LEI were as expected. Read more about What the Market Wants: Recapitalization Scenarios

“Mastering others is strength. Mastering yourself is true power.”  -- Lao Tzu

However the banking debacle in Cyprus plays out over the next few days and weeks, it should serve as a reminder that, economically speaking, much of Europe remains on shaky ground. Read more about Go Long Apple, Short the Eurozone

From the Fed, from Congress and President, and from Europe for starters. Chairman Bernanke may give us the former as he testifies on Tuesday and Wednesday this week.  Congress must act by Friday over the sequestration issues.  And Italy could’ve helped a bit today if its election resulted in a more stable government, although that does appear to be happening. Read more about What the Market Wants: The Market Wants Clarity Now!

Last week, the Dow and S&P 500 large caps hit five-year highs, the Russell 2000 small caps and the S&P 400 mid-caps made all-time highs, and the Nasdaq recorded a 12-year closing high. But some investors are evidently showing concern that it has all come too far too fast. Read more about Sector Detector: Bulls seek new blood to boost conviction

Regardless of what I say, the market clearly wants a plan from the President and Congress so that sequestration can be avoided on March 1, 18 days from now.

Our forward-looking SectorCast predicts things won’t go well—for the first time in the history of the model, the top three sectors, Consumer Cyclicals, Non-Cyclicals, and Technology, are all flight-to-safety. Last week, the market eked out a slight gain. While all style/caps were positive, only two sectors were positive on a cap-weighted basis: Consumer Cyclicals and Technology. The rest were mostly marginally negative. Read more about What the Market Wants: New Twist on Flight to Safety

Earnings season is in full swing, and on balance, investors are liking what they hear. Tech leaders Google (GOOG) and IBM (IBM) got bought in truckloads after their fine earnings reports, although Apple (AAPL) disappointed after the close on Wednesday. Read more about Sector Detector: Good news and earnings propel stocks as fear abates