I’m sure you’re all aware of the profit taking in many of the momentum stocks. As the profit taking is happening market breadth is improving. So where is the money going? Just where we suspected it would go. Into stocks that have been in multi-month consolidations. Below are charts of many of the stocks that consolidated across the summer and are now being bought aggressively. Stocks like these will most likely provide the fuel for a continued rally. One thing to note is that many of these stocks are defensive or have large dividends. Although I believe the market can still go higher, we may be seeing the first signs of rotation to safety ahead of an intermediate term top. Here are some sample charts in no particular order.