The 2Q Bull vs. Bear Debate Rages On

NEW YORK (TheStreet) -- The Nasdaq and Russell 2000 indices have been a drag on the major equity averages since early March. The Russell 2000 set an all-time intraday high at 1212.82 on March 4 while the Nasdaq set a multiyear intraday high at 4371.71 on March 7.

Meanwhile, the Dow Jones Industrial Average, the S&P 500 and the Dow Jones Transportation Average continued higher setting all-time intraday highs in April: Dow industrials at 16631.63 on April 4 with the S&P as high as 1897.28 on the same day. Dow transports continued to set all-time highs with the latest at 7774.58 on April 23.

Despite the bullish fanfare, Dow industrials, Nasdaq and Russell 2000 are down year to date by 0.5%, 0.7% and 1.7%, respectively. The S&P 500 is up just 1.6% with Dow transports up 4.2%.

The year-to-date leaders are not among the five major averages. For instance, the PHLX Semiconductors (SOX) is up 10.6% for the year to date, setting a multiyear intraday high at 601.40 on April 3.

To the surprise of Wall Street, the Dow utilities leads with a gain of 11.3% so far in 2014, setting a 52-week intraday high at 550.08 on April 17 versus its all-time intraday high set at 555.71 in January 2008.

The second quarter thus began as the first quarter ended: a choppy and volatile trading pattern influenced by numerous pivots from our proprietary analytics. I have described our value levels, pivots and risky levels as a "tangled bowl of spaghetti" at the beginning of the year and this type of trading continues in the second quarter.

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