The market took a break from its four-week winning streak and traded lower last week. The pullback wasn’t surprising as investors had little faith the market would break through resistance levels. The fact that oil closed at a record $126 a barrel after making new highs all week was perhaps the biggest burden for the market. Financial stocks were also weak but the market just looked “tired” after a month-long rally.

The Dow took the hardest hit falling 312 points, or 2.4% to close at 12,745. The S&P 500 declined 1.8%, or 25 points, to finish at 1,388. The Nasdaq lost 31 (1.3%) to settle at 2,477. YTD: The Nasdaq is down nearly 8%, the S&P has lost 5.5% while the Dow is lower by about 4%.

The resistance levels are 1,425-1,450 for the S&P 500, 2,600 for the Nasdaq and 13,500 for the Dow.

The Retail sector will play a big role in the market this week as JC Penney (JCP, $42.91), Kohl’s (KSS, $47.74) and Wal-Mart (WMT, $57.18) report earnings.

JC Penney has really taken a beating over the past 12 months after touching $80. There is support at $38 but a bad earnings announcement could mean trouble for the stock.

Kohl’s was also in a downtrend since last summer after hitting a high of $76 but has built a nice base consolidating in the lower $40’s. Kohl’s was one of the few retailers that actually raised their earnings forecasts based on better-than-expected sales so we will see.

Wal-Mart stalled once again at $60 and it will be interesting to see if a good earnings report will get this stock over the hump.

As consumers struggle with the increasing prices of gas, food and soon to be electricity, they are starting to bargain hunt. Don’t expect either trend to go away anytime soon.

Rick Rouse