The market got off to a bullish start to the week today, but if you recall, last Monday was bullish too.

As I noted in last Monday’s commentary, bullish action in the first day of the week is a hard to trust as an indicator for the week, especially during a bull market.

Unfortunately, the most impressive bullish move today was  in the XLU (Utilities Sector ETF). If you watched our weekly Market Outlook video by our CEO, Keith Schneider over the weekend the big move in the XLU should not have come as a surprise. You can watch the Outlook Video here.

Very often, sharp bullish trends in Utilities (i.e. XLU) can foreshadow bearish conditions ahead for the general stock market. So the XLU chart, with its very bullish looking breakout pattern as a result of today’s breakout should be watched closely.

What makes the XLU chart more concerning is the fact that the only Modern family member that has made any meaningful bullish progress relative to last Wednesday’s drop is SMH. The rest are limping back at best.

The bulls have not rushed in to buy the dip on a broad scale.

However, it’s not time to say the top is in yet, and there is a silver lining in the XLU breakout.

The silver lining in the XLU chart is that it could be a very good trade right now because if the market rolls over, XLU should hold up or even rally as investors look to own safer stocks.

Plus, the XLU and the general market can both rally together so we don’t need a market sell off to fuel an XLU rally.

And finally, XLU can be viewed as a sign that investors are getting nervous. The bulls should love that, because bull markets love to “climb a wall of worry.”

So a rally in the XLU could be a sign of “worry” that seems to have disappeared from another common measure of fear, the VXX.

So keep your eyes on the XLU and your exits, and don’t assume the bull market is done yet.

S&P 500 (SPY) Finally closed over last Wednesday’s high, and filled the gap created that day. Expect resistance from 239.60-240. Support around 237.70, and 236.50 before you get to the weekly low of 235.40 If that breaks watch out below with support at 233.50 and then 225.

Russell 2000 (IWM) 137 is pivotal. Will the 6-month calendar range low hold at 133.60? Close above 138 would put things in a positive perspective

Dow (DIA) Closed marginally over Wednesday’s high. Needs to get over 209 to get started up, and even still that’s in resistance. 206.50 may offer support. 205.85 is the weekly low and if that breaks then it should find support around 204. If it breaks 204 the next support level is 194 on monthly charts

Nasdaq (QQQ) Leader of the pack had a nice strong trend day up. Important support at 135.80 and if broken look for next support at 133.70

KRE (Regional Banks) Needs to clear 53.25 to move up, but lots of overhead at 54-55. The big support to hold is 51.50 as it looks heavy. Big support at 46.50.

SMH (Semiconductors) Leader of the pack, impressive recovery continues. Last weeks high is 84.77. May find support at 83, but needs to hold 81.44. If it can’t, next support at 79.60.

IYT (Transportation) Needs to break over 162 to start higher, 200 DMA just below this week’s low at 157.40. This area needs to hold or it will look like this key sector is ready to lead the market lower.

IBB (Biotechnology) Consolidation day.Stuck in a range of 295-288. Big support and 200 DMA at 285-284.

XRT (Retail) Fist day with any meaningful positive action in 7 days. If it trades over 41.50, nimble traders may catch a bounce, but it’s still a dead cat. It needs a flush and reversal pattern to think about any serious long play. Or a move above 43.Long term pattern on weekly pattern looks heavy with support at 38 at 80 month moving average.

IYR (Real Estate) Weak rally today which is surprising given the big move in XLU. Still stuck between 77 and 79 and can follow break-out either way with tight stops

XLU Strong breakout of 3 months of consolidation. 52 should be support. Looks setup to run higher.

GLD (Gold Trust) Needs to get over 120 to look good and confirm phase change. Breakdown under low at 118.50 could mean a lot more pressure to downside to follow.

SLV (Silver) Finally cleared 16 which is a key level to hold now.

GDX (Gold Miners) Wait for a break over the 200 DMA and 6-month calendar range of 23.90 to get long.