Good Wednesday afternoon, one and all (or good Thursday morning, depending on when you get to read this edition of the SCN newsletter). As has been the case for the past few weeks, today's market action was vexing. And, as has also been the case for the past few weeks, we're going to poke and prod it anyway to try and come up with the most useful and relevant analysis possible. Before we open that can of worms though, we want to update you on our sector/industry outlooks. As the already wishy-washy market wades deeper into the lethargic waters of summer, the only way any of us are going to make any real money is by pinpointing exactly where the hot spots are. SmallCap Network's Premium Advice - Elite Opportunity Actionable short and long-term NASDAQ and NYSE stocks poised for index average beating returns. Experienced daily in-depth analysis of major indices and their ETF's for short-term trading profits. Earnings options plays. Commodity trading precious metals & gold. Currency, bonds and much more! Get in the know now by getting on-the-ground trading and investing advice to make you more money. 30-Day Money Back Guarantee. Click Here and Sign-Up Today! The last time we updated the list of our favorite sectors back on.... geez, was it really all the way back to March 30th? My bad. In any case, when we updated that list back at the end of March we were still bullish on the Dow Jones Aerospace Index (DJUSAS), the Dow Jones Electronic and Electrical Index (DJUSEE), the Dow Jones Homebuilding Index (DJUSHB), the Dow Jones Clothing and Accessories Index (DJUSCF), and the Dow Jones Airline Index (DJUSAR). We were newly bullish on the Dow Jones Diversified REITs Index (DJUSDT) and the Dow Jones Heavy Construction Index (DJUSHV). Today we're culling airline stocks and REITs from the bullish list. Everything else is staying on. You may recall we were keen on REITS just as a means of hedging against a pullback from the stock market. That pullback never happened. Instead, stocks remained firm, negating the upside of REITs. The Dow Jones Diversified REITs Index broke under a key support level a couple of weeks later, and never acted like it wanted to rebound. It did its job as a hedge. We're ok with letting go here. As for the Dow Jones Airline Index, it was hanging in there until this week. While I suspect a bounce is due (in line with a continued tumble in the price of oil), we're not going to be stubborn here in the shadow of a break below the key 200-day moving average line (green). Everything else we've mentioned recently is doing reasonably well. In fact, as few of our remaining sector/industry favorites are doing exceedingly well. One of those areas is the heavy construction arena, which uses the Dow Jones Heavy Construction Index as a proxy. You may recall it had already logged a convincing reversal pattern when we initiated a bullish call back on March 30th. In the meantime, with the move from 419 then to the current price of 443, the Dow Jones Heavy Construction Index has not only advanced more than 5% in a month and a half, but has hurdled the key 200-day moving average line (green) at 436. The move above the 200-day line is catalytic in itself, but as we explained with our first look, these stocks were needlessly oversold thanks to unmerited pessimism regarding major construction projects this year and next year. In any case, we're only updating these recent calls today because we want to add a new one to the list - the Dow Jones Personal Products Index (DJUSCM). I'll be the first to acknowledge that with just a quick glance the Dow Jones Personal Products Index doesn't look all that exciting. There's no breakout underway. The longer I look at the chart though, the more I'm inclined to think the pattern we've seen take shape since late-2013 is going somewhere... soon. There's not much room left inside this converging wedge pattern, and as you can see, the bulls have been and still are putting a ton of pressure on a huge (and potentially catalytic) technical ceiling at 509. After months of consolidation, one little move could kickstart a buying avalanche. The constituents in this index are the ones you'd think. The biggest one is Procter & Gamble (PG), though Unilever (UL) is in there too. The index also seems to have more than its fair share of cosmetics and skincare names like Estee Lauder (EL) and Revlon (REV). As we've said many times since we've started taking these industry-specific looks though, the idea is to take our theme and find your own pick within the space. The smaller and more obscure names are often times the better ways to play the theme or industry trend we're pointing out. To get you started, here's a quick list of all the listed names that fall into the "personal products" category. Though P&G is the dominant name in this index, it's probably the last name I'd be interested in owning at this time. Just so there's no confusion, these industry calls aren't the same thing as our sector calls we also issue from time to time. The idea is the same though - finding the right group at the right time is half the battle. Our sector calls are a little longer-term in nature and more fundamentally-based. These industry calls are shorter-term and more technical-based. There's a lot of overlap though, and everything matters in the end. We'll update our mental industry portfolio as needed. Let's just go ahead and slice and dice today's market action to see if we can make sense of it. Thanks for Nothing, Janet Well, there you are.... we still don't know when the Fed is going to start raising interest rates, but we can be pretty sure it's not going to happen in June. That's no real surprise to us, of course. After all, we were the ones trying to figure out why the Federal Reserve was acting like it was in a hurry to inflate interest rates at all when there was no need to do so on the near-term horizon. Regardless, it's not going to happen next month with Janet Yellen has an opportunity to do so. The news modestly slowed the rise in interest rates and the equivalent weakness in bonds. Honestly though, I think both of those bigger trends are still in place, and are just one day away from heating up in a big wat. As the chart below tells us, the 30-year Yield Index is still knocking on the door of a ceiling at 3.1%, and the Long-Term Treasury ETF is pressing into a technical floor at $68.70. Considering both have been testing those respective waters for over a week now, just a little more "umph" could open the floodgates, so to speak. And, considering the U.S. dollar has already dropped hints of a reversal of its short-term uptrend today in addition to the fact that a rate hike is coming sooner or later, I'm still inclined to think actual interest rates are going to keep inching higher from here despite today's intraday slowdown. As for what it all means to the stock market, what's bad for bonds is ultimately good for the market, although I don't think that inverse relationship is strong enough or real-time enough to blindly bet on stocks right now. In fact, we're still ultimately betting against stocks in the near-term. Today's action didn't exactly hurt the bearish thesis either. The daily chart of the S&P 500 below is what it is. After a bullish breakaway on Monday, the bulls have just been unable to muster any follow-through. We're still above 2093, which is the big floor I'm eyeing as a make-or-break level. But, the inability to forge ahead in the meantime is a bit of a red flag. The NASDAQ is working on a similar slowdown. It's similar in a lot of ways, actually. One of the similarities is the shape of today's bars - they're both doji patterns, suggesting indecision and transition. Both indices' volatility indices are also unable to move any lower, already resting on key support levels. Stocks are still very much on the fence. While it's not the "fun" call to make, the smart thing to do here is remain on the sidelines and patiently wait for a move worth trading. We really do think we're getting there, though we're not there yet. In the meantime, there are some industry groups overcoming the marketwide lethargy. We talked about one of them just today... personal products.