Our Blue Chip Growth stocks started the second quarter on a very strong note, and as our stocks release their first-quarter earnings reports, I expect they will emerge as the market's newest and strongest leaders.

Financials remain a mess, and it appears that the short-covering rallies we witnessed in March are finally coming to an end. Just take a look at financials' and homebuilders' recent performance–you'll see that they're not too perky.

I don't believe financials are out of the woods yet. Analyst downgrades for financial stocks have been relentless. For example, J.P. Morgan slashed its earnings estimates for Merrill Lynch by 45% on fears that there may be more write-downs. Merrill Lynch downgraded Bank of America from "neutral" to "sell" and lowered its 2008 and 2009 earnings estimates. Lehman Brothers also suffered from earnings estimates cuts. Goldman said that the $460 billion in credit losses it foresees may result in even tighter credit conditions. These stocks will be posting continued write-downs due to rising mortgage delinquencies, and so the entire housing sector will remain under water until 2009.

The two financials you should keep your eyes on right now are UBS and Citigroup. There's increasing talk from the former CEOs of both UBS and Citigroup that these companies might be better off being broken into little pieces. Citigroup spun off its credit card division last week, which is more evidence that it's going to be sold.

What we're witnessing right now is simple: The market is rotating out of financials and homebuilders and refocusing on stocks with the best sales and earnings. The cream's rising to the top, and that means our Blue Chip Growth Buy List is benefiting. I'm very happy with this action and hope that you're following my advice and buying the stocks that are under my buy limits right now. If you've been waiting to pull the trigger, now is the time my friend.

Speaking of the Buy List, one of our Blue Chip Growth Buy List stocks got first-quarter earnings season off with a bang Friday!