While I still think the market will resolve this long period of consolidation to the upside, what I know is that between 1265 and 1302, the market is not telling us anything useful. It is just consolidating. So no one can tell you which direction the market is going to go next until the market itself tells us by either decisively breaking 1265 to the downside or 1302 to the upside.

That could happen this week week, as the portfolio managers come back from the beach. The first few days after Labor Day will show their initial bias, bullish or bearish, and then if the other side cannot turn that tide, we'll know what the major trend is.

If that trend turns out to be down, I expect the weakness to come from and be focused in the homebuilders, related retailers, the financials and possibly energy. The home mortgage resets will be about five times as bad in 2009 as they are in 2008, so there is good reason to anticipate weakness in these areas. On the other side, we should see strength in technology, exporters, materials, commodities and the like.

If the trend turns out to be up, it almost certainly will be led by technology and exporters, as the financials have a long way to go before they're back on solid ground. So I think technology is the right sector, whether the next move is up or down, and we should know shortly which direction we'll be dealing with.