It was easy to get excited last week with break-outs, new 52-week highs, and the like because the market has been waiting for a pre-election rally. Supposedly, history is on the side of the longs in the period before an election. Ever since the market first leaned back, the historical trend has reneged on one promise after another. Here is a quick run-down on the current disappointments (for the bulls anyway):

NASDAQ: Rejected from its 200DMA. 2004 downtrend intact.
DOW (Industrials): Rejected from its 50DMA. 2004 downtrend intact. Far below the 200DMA even.
DOW Transports: Got tired of waiting for the Industrials to break out from its funk and has now taken two large spills…up-trend still intact for now. New high in the Transports has officially been left unconfirmed according to Dow Theory.
Housing Index (new entry!): Dropped below the 50DMA, although still above the 200DMA…for now.
S&P 500: Dropped below the 200DMA, although still above the 50DMA…for now.
A/D Line: Back below the September highs, up-trend still intact. This is the most disappointing to report given I JUST looked at this one for the first time in a long time, and it was looking like it had confirmed a new, true break-out!

I argued earlier that the market looked like it was setting us up for something notable. Perhaps the answer is slowly but surely revealing itself.

Be careful out there!