This is a confusing market to get a sense of overall market direction.

The last three days have seen distribution within the indexes as declining issues have led advancing issues, yet the major indexes are closing in the upper 2/3 of their daily ranges. Consequently, the indexes are showing tests for supply, yet the internals are indicating distribution. This is a problem with analyzing indexes; a few stocks can skew the results of the daily bar on the indexes, while many of the other stocks within the indexes are going in the opposite direction.  This is why we need to focus most of our attention on individual stocks to see which stocks are leading, and if they are continuing to perform.

The leading stocks continue to be dominated by Exploration and Production stocks, followed by semiconductor devices and airlines which are in the Passenger Transportation industry group. This view of the Woodward and Brown Leaders SmartGroup which gives us an instant snapshot of 25 of the current leaders. The pie charts in the body of this report confirm the current leadership of the Exploration and Production stocks and the Semiconductors which dominate the 25 stocks below.  The airline stocks are also near the top of the list in the pie charts below.  These groups have been dominant for quite some time as the top 25 stocks below have outperformed the SP500 by a wide margin since April 1st.

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