S&P 500 Index		-0.87%
Communication Services XLC		-0.29%
Consumer Discretionary XLY		-1.13%
Consumer Staples XLP		-0.87%
Energy XLE		-2.57%
Financials XLF		-1.77%
Health Care XLV		-1.08%
Industrials XLI		-1.48%
Materials XLB	+0.33%
Real Estate XLRE		-1.17%
Technology XLK		-0.30%
Utilities XLU		-1.23%

NASDAQ Bobs & Weaves

The NASDAQ Composite exhibited quite a bit of grit yesterday, rallying back from more than a 2% drubbing out of the gate to finish down 0.09%. The Composite actually peaked into positive territory three times before coming up just a tad short by the closing bell.

The internals, however, were not, as 232 names closed at 52-week lows and only 38 at 52-week highs. In other words, if the goal of the rout was to reprice stocks, including bringing all the high-flyers down to earth; then mission accomplished.

Market Breadth	NYSE	NASDAQ
Advancing	889	1,618
Declining	2,488	2,631
52 Week High	75	38
52 Week Low	95	232
Up Volume	1.99B	2.45B
Down Volume	2.89B	2.27B

The selling was intense enough to finally lure buyers off the sidelines, but they were very selective.  Meanwhile, after the close, there were huge moves higher on earnings results, which also underscores the notion stocks are oversold enough to finally celebrate good news.

Portfolio Approach

There are no sector weighting changes this morning to our Hotline Model Portfolio.

Today’s Session

The CPI report has come in hotter than expected and reaction was swift and violent.

• Year over year headline +8.3% consensus +8.1%
• Year over year core +6.2% consensus +6.0%

CPI Y/Y

CPI Core Y/Y

Month to Month

• Headline +0.3% consensus +0.2%, month ago +1.2%
• Core +0.6% consensus +0.4%, month ago +0.3%

The downside reversals are probably too dramatic, but the ranges for the session have been established.

Key upside resistance NASDAQ 12,545, S&P 500 4,050 & Russell 2000 1,787.

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