The Bulls remain in control as they drive the major indexes to just under their 200-day moving averages.

We anticipate key battles at the 200-day averages.

And until those levels are resolved we are hesitant to raise the Green Flag for a buyer’s bias.

Whether or not the economy is in a recession or the credit crisis is behind us is pretty much undeterminable.

What we know is that the stock market is often the best leading indicator for the underlying business cycle.

And we need to respect that even bear markets have drawn out periods of relief rallies and vice versa.

In the bigger technical picture this market is far from good.

With the major indexes’ 50-day averages trending below the 200-day averages it’s easy to see that the underlying trend is down.

This is most convincing with the Semiconductors, Banks, Broker Dealers and Retailers, which have fallen hardest over the past several months.

These sectors, which are correlated strongly with general market strength, have far to go before they reclaim new highs.

The Transportation Index has shown surprising strength over the past two months, and is just 3% under its high made last summer.

And the Defense sector is not far behind.

Dow theorists place great emphasis on transportationas an indicator of the health of the economy for its role in moving goods.

If transportation becomes a new leader it will bode well for the market. But as fuel prices also rise it seems unlikely both will remain on the same path.