We’re maintaining our Sell Bias on stocks for lack of better technicals. Multiple Distribution Days, where sell-volume has out-paced buyers, has been been a consistent warning for the better part of a month now.

What was hoped by Bulls to be a trendline bounce during the “flash crash” two weeks ago is now being tested as the Dow and S&P 500 close below their 40-week moving averages for the first time in nearly a year.

Not one single stock sector posted a gain last week as the number of them trading under their major averages increased to about half.

The rapid deterioration has many speculators, including ourselves, on the lookout for a bounce of some sort from these levels, as corrections are notorious for.

Of particular interest are financial stocks (XLF), and most notably the Broker Dealers (IAI), which helped spur a broad market rally Friday after the finalization to Congress’s financial industry reform.

Whether or not the sector has what it takes to lead anything sustainable remains to be seen. The Broker Dealer Index ($XBD) shows a significant breakdown on its point-and-figure chart, which illustrates a significant move by filtering out the noise of random price-action.

Relative strength from the Nasdaq 100 (QQQQ), S&P 400 midcaps (MDY) and Russell 2000 small caps (IWM), which unlike their parent indexes are all trading above their 40-day moving averages, also gives Bulls some evidence that not all is completely broken in their trend.

Similar resilience from Transportation (IYT), Semiconductors (SMH) and Retail (XRT), key components of sustainable broad market trends, are also encouraging.

Bounce or not, the prospects of more selling look most striking in a 15-year monthly chart of the Dow where the right side of a bearish head-and-shoulder pattern may be forming.

It’s never been our goal to predict the long-term trends. What we want is to correctly identify friendly or unfriendly conditions to buy or sell our beloved Growth Stocks.

While our overall bias prevents us from buying, there are still a number of solid looking companies poised to breakout of technical bases. No telling if they’ll get the bids needed or not.

Last week a clear flight to safety was seen with higher bids for Treasury bonds, one of the few gainers, as well as Barclay’s Aggregate Bond Index (AGG), which hit a new high.