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The Major Trend Index rose 0.03 to 1.12 in the week ended February 7th, but it remains on the low end of its positive range.

Estimated net cash flows for bond mutual funds registered positive for the first time in four weeks ($1.5 billion). YTD this $3.3 trillion fund genre is barely hanging on to positive net cash flows ($0.9 billion). In mid‐February of each of the past two years, bond mutual funds had already collected more than $40 billion in net inflows. We continue expecting net cash outflows for bond mutual funds in the new year.

YTD net cash flows for bond mutual funds are back in negative territory, while domestic equity mutual funds hang on to positive net inflows. Equity ETFs had another rough week; YTD U.S. focus equity ETF net cash outflows are registering at nearly $32 billion.

GICS recently announced their first revision since June 30, 2010, which goes into effect on February 28th.

January could be a month that disrupts the current trend, but one month is not enough time to merit a changing of the guard.

Currently, the Unattractive range of our GS Scores is characterized by two themes, commodity-oriented groups and high dividend groups.

Twenty eight months after purchase it still ranks Attractive, but the industry fundamentals have changed.

In addition to impressive factor readings, we like the fundamental trends in this space.

Consumer Discretionary sector weightings sank among all three market tiers, as this segment led the market lower in January. Health Care and Utilities sector weightings increased, as both outperformed for the month.

The Equal Weighted Index has outperformed the Cap Weighted Index in seven of the last nine months.

Small Cap Growth Outperforms (On Relative Basis) In Down Month

Small Cap Premium Continues Upward To 23%. Large Caps Lead On The Downside In January

Up/Down Earnings: Q4 Results Just Below Historical Average. Median Q4 YOY Revenue Comparisons: Strength In Large Caps. Q4 Median Company Earnings Growth: Initial Results Are Impressive

The emerging markets are in a much better financial position to weather any financial turmoil than they have been in the past.

EM valuations look cheap in a stock market world that otherwise doesn’t. But even their “cheapness” bothers us.

The last few innings of a cyclical bull market generally favor trend or momentum-oriented strategies, rather than mean-reverting ones like “Playing The Bounce."

Small Caps are close enough to a new relative strength high that it’s possible a final revision might be necessary before the Small Cap tide flows out.

Last month we suggested the top sector for 2013 would fall from grace in 2014, and the Consumer Discretionary stocks have been quick to cooperate in the last five weeks.

The industry price momentum effect - observable in data from the last several decades - has strongly reasserted itself in the last 18-24 months.

While our tongue-in-cheek “Correlation Of Everything” measure has retreated from record levels, it remains far above anything seen prior to 2010.