After doing my U.S. Sector and Sub-sector review, there is a common theme that I think is worth pointing out. Structurally speaking, things now look worse. The best sectors that had been leading are now breaking uptrend lines and key support. Meanwhile, the laggards continue to hit new lows. Things overall have worsened in my opinion.

Now, short-term we had a lot of very specific downside targets in most sectors coming into the new year. Over the past week and a half I would say that a very large majority of the S&P sectors and sub-sectors have now achieved those downside objectives. I've been very clear about where we want to cover tactical shorts and they are detailed in the Chartbook. Going forward we would much rather be sellers of strength, than buyers of dips, although there are a few exceptions.

Here are my notes from this week's sector review:

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:

Dear Members,

Thank you to everyone who registered for the new All Star Charts membership. I'm super excited to have you guys as part of our team. Remember, we're all in this together trying to navigate through this market day in and day out. It’s a puzzle that is constantly evolving and what we’re here to do is look for major trends around the world and then break those down to find more intermediate-term investing opportunities based on those structural setups. The new All Star Charts was an idea we’ve been working on for a long time, so we couldn't be happier to finally be able to share the ideas and the homework that I already do with all of our new members. Welcome to our club!

For the past 2 months I’ve been very vocal about how there’s been no reason to own the major U.S. Stock Market Averages. If there’s been any trade to be made, it's