SPY closed Wednesday at 139.19. It is holding on to support at the convergence of its 50-day simple moving average and the uptrend line shown. The false breakdown of this support was quickly reversed, and in fact SPY has now broken above the upper line of a symmetrical wedge that has formed during April. RSI, MACD, and Slow Stochastic are all pointing up bullishly.

I have been reading various suggestions of a foreshadowed weakening of the U.S. economy due to the historical correlation of stocks with prices of things like oil and milk, both of which have weakened lately. However, if the market can hold on and definitively break out of this technical consolidation, there is more upside in store.

The VIX (CBOE Market Volatility Index—a.k.a. "fear gauge") closed Wednesday at 16.82. It has been rebuffed several times by strong resistance at the important 20 threshold. The TED spread (indicator of credit risk in the general economy, measuring the difference between the 3-month T-bill and 3-month LIBOR interest rates) closed Wednesday at 38 bps, where it has flat-lined since mid-February. Both readings are positive for stock bulls.

Latest rankings:  The table ranks each of the ten U.S. industrial sector iShares (ETFs) by Sabrient's proprietary Outlook Score, which employs a forward-looking, fundamentals-based, quantitative algorithm to create a bottom-up composite profile of the constituent stocks within the ETF. In addition, the table also shows Sabrient's proprietary Bull Score and Bear Score for each ETF.

High Bull score indicates that stocks within the ETF have tended recently toward relative outperformance during particularly strong market periods, while a high Bear score indicates that stocks within the ETF have tended to hold up relatively well during particularly weak market periods. Bull and Bear are backward-looking indicators of recent sentiment trend.

As a group, these three scores can be quite helpful for positioning a portfolio for a given set of anticipated market conditions.

Observations:

1. Financial (IYF) stays at the top of the Outlook rankings with a 79, and Technology (IYW) continues in second place with a 74. IYF still has one of the lowest (best) forward P/Es, and it retains support among analysts as the banks re-emerge. IYW remains strong in its return ratios as margins are high for tech products, but it is strong across the board on all relevant factors, with the exception of analyst upgrades, which is only modest. Also, Industrial (IYJ) has moved into third place. This is a bullish top three.

2. Energy (IYE) and Materials (IYM) continue to be beaten down by analyst downgrades of earnings estimates, yet they still reflect the lowest (best) forward P/Es.

3. Telecom (IYZ) remains at the bottom of the rankings with an Outlook score of 5. It is saddled with the worst return ratios and the highest forward P/E. It is again joined in the bottom two by Utilities (IDU) with an Outlook score of 11. IDU has low long-term growth projections and a high forward P/E, as well as renewed earnings downgrades among Wall Street analysts.

4. Looking at the Bull scores, Financial (IYF) and Materials (IYM) have been the leaders on strong market days scoring 57, followed closely by Industrial (IYJ) at 56 and Technology (IYW) at 51. Utilities (IDU) is by far the weakest on strong days, scoring a lowly 32.

5. Looking at the Bear scores, Utilities (IDU) remains the investor favorite "safe haven" on weak market days, scoring a strong 66, followed by Consumer Goods (IYK) at 62. Both scores are lower than last week's. Materials (IYM) shows the lowest Bear score of 41, followed by Industrial (IYJ) at 47, indicating that Materials and Industrial stocks have tended to sell off the most when the market is pulling back. But both scores are higher than last week's. And Energy (IYE) has risen somewhat to a respectable 48. These are somewhat bullish developments.

6. Overall, IYF still shows the best all-weather combination of Outlook/Bull/Bear scores. Adding up the three scores gives a total of 187. IYW is next at 179. IYZ is the worst at 105. IYF shows the best combination of Bull/Bear with a total score of 108.