A most interesting week in the markets. Some notable phase changes:

Transportation (IYT) confirmed a warning phase. That means, the price trades below the 50-daily moving average. In the spirit of Charles Dow and his theory, the Industrial sector made a new high mid-week while Transportation fell. The presupposition is that there are more goods being made than sold. With demand slacking, it could be an early warning signal that the economy will take a downturn.

Regional Banks (KRE) confirmed a distribution phase. That means, the price trades below the 200-DMA. Many institutional investors watch the 200-DMA and exit any long positions once that moving average is violated. Regional Banks, as our Prodigal Son, typically rises as treasury yields rise. KRE represents how robust economic activity is in communities rather than in states or in the nation at large. KRE’s stark underperformance, compared to this week’s rising yields, does not paint a roseate picture.

Three major indices had inside trading days on a relatively quiet Friday. Furthermore, all four indices remain in Bullish Phases. The S&P 500, DJIA and the Nasdaq 100 all made new all-time highs earlier last week. And then retreated. Do the big gun indices now resemble twin peaks formed through the millennium of erosion? Biotechnology (IBB), unlike Regional Banks, touched and then held the 200 daily moving average. In contrast to the lack of confidence we see in Regional Banks and Transportation, the bounce in IBB could mean that speculators are on the sidelines, yet are encouraged to buy should the bleed in the weaker sectors stop. However, unless IBB can clear 320, it’s not enough to spur huge buying.

Interestingly enough, it seems that all the bad news about the horrific brick and mortar retail sector is out. At least for now. Aptly named Resuscitation Annie this year, Granny Retail (XRT) climbed back from the gutter to close over the pivotal 40.00 level. That leaves IBB and XRT as possible market saviors for this week.