After displaying a classic V-bottom reversal to what turned out to be a quick and anemic attempt by the bears to bring about a real correction, bullish fervor is becoming contagious, especially as the traditionally strong holiday season approaches. Indeed, the brief selloff was snatched up as a buying opportunity as I predicted it would, but my concerns about the market consolidating and struggling to hit new highs before year end were quickly dismissed. So, with nothing but blue skies overhead, will the party simply roll on? Read more about Sector Detector: Bulls rule as volatility recedes and investors position for holiday cheer

Bulls showed renewed backbone last week and drew a line in the sand for the bears, buying with gusto into weakness as I suggested they would. After all, this was the buying opportunity they had been waiting for. As if on cue, the start of the World Series launched the rapid market reversal and recovery. However, there is little chance that the rally will go straight up. Volatility is back, and I would look for prices to consolidate at this level before making an attempt to go higher. I still question whether the S&P 500 will ultimately achieve a new high before year end. Read more about Sector Detector: Bullish conviction returns, but market likely to consolidate its V-bottom

Scott MartindaleLast week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. Read more about Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Volatility continues to increase in the stock market and many of the leaders are breaking down. In particular, semiconductors took a rather big hit when one of the bellwethers warned of weakening global demand. Nevertheless, despite the significant headwinds, I do not think this spells the end of the bull market. But the technical damage to the charts is severe, particularly to the small caps, which are in full-blown correction mode. The large caps must show leadership and rally immediately -- or it will put at risk the critical and widely-anticipated year-end rally. Read more about Sector Detector: Semiconductors get slammed as investors scramble to protect profits

Scott MartindaleThis seasonally weak time of the year has proven reliable once again. As I observed last week, the volatility index often hits a peak in October but has never hit a trough during this notorious month. Last week, I warned of more downside in stocks before any new highs are challenged. It was the type of week that tests investors’ bullish conviction, and it was way overdue. Read more about Sector Detector: Overdue market weakness finally hits, but sector rankings turn bullish

Yes, the market showed significant weakness last week for the first time in quite a while. In fact, the Dow Jones Industrial Average moved triple digits each day. But it was all quite predictable, as I suggested in last week's article, and certainly nothing to worry about. Now the market appears to be poised for a modest technical rebound, and longer term, U.S. equities should be in good shape for a year-end rally. However, I still believe more downside is in order before any new highs are challenged. Read more about Sector Detector: Stocks fight off predictable weakness, but expect more downside

Scott MartindaleStocks ended last week on a high note, closing a smidge above strong resistance at 1900 for the S&P 500, which set a new closing high for the large-cap index, albeit on low pre-holiday volume. With the Memorial Day holiday giving us a short week of trading, all eyes are on voting in Ukraine, where a decisive win for billionaire business tycoon Petro Poroshenko seems assured. Read more about Sector Detector: Breakout or another bluff? Bulls seeking confirmation this week