Well, we can't say we're surprised the market ended the week on a low note. Stocks got a little overheated over the course of late last week and early this week, and all it took was revisit of a known ceiling to cap the rally and hand the reins back over to the bears... at least for a day. Still, it's not like the market got pushed past the point of no return - there's a chance that today was simply a bad day, and the bulls could be back in charge again by Monday. Yes, that's the long way of telling you stocks are still on the fence, trapped between a rock and a hard place. The chart of the S&P 500 below is what it is. The ceiling at 1884 clearly held the line, finally repelling the bullish effort from the index. Yet, the combined 20-day and 50-day moving average lines at 1860 are still intact as a support level. Until/unless the index breaks out of that range, there's not a lot to talk about. Here's the thing... the S&P 500 isn't the only index out there. The NASDAQ Composite looks far less hopeful than the S&P 500 does. How so? The NASDAQ did break under its 20-day moving average line, and to underscore that dip, the NASDAQ's volatility index (the VXN) made a pretty good upward thrust after forming a reversal bar yesterday (after kissing its lower Bollinger band). And, the VXN still has a ton of room to keep rising, just like the NASDAQ itself has some room to keep sliding lower before it finds a meaningful floor around 4000. Putting it all together, a purely-scientific assessment of the NASDAQ Composite has to be a bearish one. Will the glimmer of hope we can muster for the S&P 500 sway that reality? Not really, although just in the interest of being smart it would be prudent to wait for the S&P 500 to move under 1860 before getting all the way in the short-term (and I stress "short-term") bearish camp. In fact, given that we can't do any trading over the weekend anyway, why don't we reconvene on Monday and see if traders' moods have changed? It wouldn't shock me if they had, as fickle and inconsistent as stocks have been lately. They're not going to be stuck in a rut forever though. Q1 Earnings Update... Better Than Guessed A little good news on the earnings front. As of a week ago, the S&P 500 was only on pace to earn $27.50, just a tad below the original projection of $27.60. As of yesterday, however, the S&P 500 is on course to earn $27.62 per share... a tad better than first expected, and 7.1% better than the year-ago figure of $25.77. At that level, the S&P 500 is now priced at a trailing P/E of 17.05. That's still on the high end of normal, but it's palatable. The forward-looking P/E for the S&P 500 now stands at 14.94, which is a lot more palatable, but would also require the market to grow earnings to the tune of 14.1%.... and I just don't know if corporate America is in a position to make that happen. It's the only forecast we've got right now, however, so it'll have to be the one we work with until something better comes along. For what it's worth, only about 40% of the S&P 500's constituents have posted first quarter results, so we could still see some changes to Q1's metrics. I don't think we'll see any major shifts from here, however. If you want to know where the winners and losers are so far, the next couple of tables tell the tale. In terms of earnings growth, materials, technology, healthcare, and energy have all done quite well. The first three don't surprise me, as they've posted strong growth for a while. Energy stocks did surprise me, however, although I should have known it was coming... considering I've been paying close to $4.00 for a gallon of gasoline for the better part of the first quarter. The financials have also been lackluster as a group, but remember, most of that weakness was the result of the big miss from Bank of America (BAC). I'll remind you to not get excited about one quarter's big growth or big decline. Unless the sector has produced similar results in the quarter's leading up to the current quarter [I included the last three quarters' growth rates so you could see], be cautious with any conclusions. Though they're far less important, here's the beat/miss ratio table. Most all of it looks to be fairly typical, though we can see here that energy and healthcare have done surprisingly well, in line with their big growth rates above. We'll be taking a closer look at sector-level earnings trends and growth in future editions of the newsletter, when we have time to devote to the details. There's something else I want to close with today. The Flight to Safety Continues We showed you this chart a few days ago, and it was fascinating then. It's gotten more fascinating in the meantime, however, just because it's showing us something very unexpected, but very trade-worthy. What I'm talking about is a comparison of the 12-month performance of all the major sectors, as represented by the iShares sector ETFs. Six months ago everything was rallying like gangbusters except for utilities. But now, the only sector doing anything of any bullish interest is the utility sector. We saw this unfurling a week and a half ago, but since then the disparity has become even more pronounced. As for what it means, my "risk off" theory is still in place, and perhaps even more so than it was then. The fact that the more aggressive NASDAQ is tanking while the less aggressive S&P 500 is holding up underscores the notion that traders are still generally steering clear of risk and gravitating towards safety and stability. At this point - regardless of how things kick off come Monday - I think we can take the whole thing as a clue that this summer is going to be a period when you want to own utility stocks before you own anything else. Every sector has its day in the sun, you know?