My 2004 Range Rover sputtered last Friday morning.

By sputtered, I mean the fuel pump gave out. Good thing I have AAA. They came immediately to the rescue and towed the car to the service shop.

Once a car gets old, you expect parts to deteriorate. We just replaced the radiator pump two months ago. Before that, we replaced the battery. Before that, the brakes. So, no surprise yet another part finally bit the dust.

The market sputtered last Friday morning as well. It seems it too needs a new fuel pump. The power charged rally beginning November 9th finally went in for service.

Like the Range Rover, the market’s brand-new radiator pump, battery and brakes all helped get it to its current destination.

Although the fuel pump went and the body of the bull run grows old, the newer parts keep the car driving.

The Modern Family meanwhile, fights over the fate of the car.

The Russell 2000, Financials, Transportation and Semiconductors all love that old car. They are not ready to sell it just yet.

Yet, Biotechnology and Retail are both lobbying the rest of the Family to put a “For Sale” sign on the dashboard. Either that or trade the car in for a later model.

If they keep the car, what part might fail next? If they sell, what will they replace the old car with?

These answers to those questions are exactly the ones that are driving our current and future trading plans.

On the one hand, we too love the old car. We look for trades that have not exceeded a sound risk/reward ratio in the direction of the stronger sector trends.

The Russell 2000 in and of itself has far exceeded a sound risk/reward ratio. Certain individual small-cap stocks within the Russell basket have not. Same applies to Semiconductors (SMH), Transportation (IYT) and Regional Banks (KRE).

However, we would be remiss not to add to the equation the “what if” IWM, SMH, KRE or IYT seriously correct. Does that mean that in the chance of a correction the small-cap, semiconductor, bank and transportation stocks that have yet to rally will sell off even harder?

That nagging notion has us looking at countertrend trades.Instruments that have yet to materialize might offer the best (or at least the best risk/reward) opportunities.

In that quest, we believe the most logical choices correspond with the optimism around a growing infrastructure. Raw materials, energy, and utilities top the list.

We will also look at real estate, particularly commercial, that pertains to infrastructure. For example, real estate for commercial enterprises that inventory and sell construction equipment, trucks, and raw materials to name a few. We will also look at the companies that manufacture and distribute all the above.

If Biotechnology and Retail continue to sell off while the rest journey in the old car to new highs, we will consider that evidence for patience.

Just like shopping for a new used car, make sure your trading plan follows a few simple steps:

1. Decide how much you can afford (to lose)
2. Check and compare historical prices
3. Take it out for a test-drive (probe with a smaller position size)
4. Then if you like what you see, negotiate a good deal (calculate risk/reward).

S&P 500 (SPY) 218 the pivotal point 219.60 August all-time high

Russell 2000 (IWM) Another new high on Friday. If holds around 129.75 could see a move to the top of a channel around 134

Dow (DIA) 187.35 nearby support. 188-189 is the top of a channel on the monthly chart-write this down since if cannot close above there by the end of November could be time to run

Nasdaq (QQQ) 117.25 pivotal support held. Confirmed the bullish phase marginally. 118 now resistance

KRE (Regional Banks) Forget car. This is a freight train

SMH (Semiconductors) New highs-70.50 resistance point

IYT (Transportation) After last week’s 2 inside days, went up out of the range. This too is important this month-a close above or below 159.40

IBB (Biotechnology) 280 support 290 pivotal and 300 big time resistance

XRT (Retail) 44.50 pivotal area. 46.00 substantial resistance

IYR (Real Estate) Back over 74.15 this week good

GLD (Gold Trust) In bear flag mode unless it can back over 117 and hold

GDX (Gold Miners) 20.05 big support on monthly charts

USO (US Oil Fund) 10.50-10.80 the key resistance to clear

TLT (iShares 20+ Year Treasuries) 120.15 point to hold

UUP (Dollar Bull) 26.25 good chart resistance-high Friday 26.24