The U.S. Stock market and most of its sectors continue to rally. As happy as we are to see this, and as much as we expect this to continue through February, these are only counter-trend rallies within larger structural declines. The good news is that counter-trend rallies in bear markets historically tend to be the most powerful kind of rallies. I think there is still room to the upside in many different sectors with very well-defined risk.

All of the charts have been updated on the Chartbook. Here are my notes for this week's sector review:

As you guys know I started to turn bullish towards the stock market over the last couple of weeks for the first time since last October. Now, I want to make sure that we all understand that this is just a counter-trend rally within an ongoing bear market. Regardless, this is still a rally that I would like to participate in on the long side and every day

I am finding more and more opportunities to buy beaten down names, just for a trade, of course.

There is much more to life that what the Dow did yesterday. Every week we go chart by chart looking at all of the major U.S. Stock Market Indexes. This analysis includes the S&P500, Dow Jones Industrial Average, Dow Jones Transportation Average, Dow Jones Utility Average, Nasdaq100, Russell 2000, Mid-Cap 400, Russell Micro-cap Index, etc.

All of these charts have been updated on both Weekly and Daily timeframes in the Chartbook and these are a few of my notes from this week's analysis including some updated risk vs reward levels:

Please note: this is multi-timeframe analysis looking both long-term and short-term. Defining who you are as an investor

, particularly your time horizon, is especially important at this point as, for the most part, the weekly charts and daily charts are telling different stories because they are on different time frames.

Going country by country all over the world is one of the best tools that we have as market participants. The value that I’ve gotten over the years from looking at the behavior of all of the countries, instead of just the U.S. is a huge factor in why I am such a top/down weight-of-the-evidence guy. There are signs of strength and weakness that we see from international markets that might not be so obvious in the S&P500, for example.

Last September, I promise you that the reason I got bullish tactically was not because of what I was seeing in the United States, but what was happening around the world. There were simply too many bullish momentum divergences and downside objective achieved internationally to ignore. Something was up, and in fact, the counter-trend rally that we got in the U.S. actually exceeded my expectations.

When we talk about leadership in the market, I think it's important to go sector by sector to see where the leaders are and where the laggards might be. To help with this study, we take a look at each of the 10 S&P Sectors and compare them to the performance of the S&P500. This Relative Strength Analysis is one of the best ways to see sector rotation and changes in market leadership.

I have just updated all of the Sector vs S&P500 charts in the ChartBook and here are some of my notes: