Info!! Marketplace As Well As Sector Perspectives For A Sunday

the recent posts on marketplace cycles, I mapped out (chart above) how I've been viewing the electrical flow cycle, given the divergences noted inwards before posts. With the surge of buying inwards the markets the past times 2 days, it is probable that the recent lows stand upwardly for toll lows for the electrical flow cycle, implying higher marketplace prices good into 2009 (given the stone oil proportionality of the duration of the menses from the momentum high to the toll lows in addition to the menses from those lows to the side past times side bike high). That's the expert news. The bad word is that, at the larger fourth dimension frame, nosotros made a momentum altitude inwards 1999/2000 in addition to a toll altitude inwards October, 2007, implying that nosotros get got yet to brand momentum in addition to toll lows on this larger fourth dimension frame--and that those lows are probable to accept out the 2002-2003 lows.

* Sector Comeback - What a difference a twain of days make! Here are the Technical Strength readings past times sector every bit of Friday's close:

MATERIALS: +260
INDUSTRIAL: +80
CONSUMER DISCRETIONARY: +140
CONSUMER STAPLES: -160
ENERGY: +160
HEALTH CARE: -60
FINANCIAL: +260
TECHNOLOGY: -100

Note that in that location is yet prove of considerable sector rotation, every bit coin left the relative rubber havens (consumer staples, wellness care) in addition to went into the rescued fiscal sector. Note every bit good that nosotros are really far from beingness overbought, despite the abrupt ascent of the terminal twain of days.

* Money Finally Flowing Into the Market? - The large inquiry is: how much of the ascent belatedly inwards the calendar week was majority brusk roofing in addition to how much represented fresh buying interest? Money flow information from the Wall St. Journal constitute meaning positive coin flows into the Dow stocks in addition to the major S&P sectors on Friday. More on that theme inwards the indicator review to hold upwardly posted Mon AM.

* Watch for Themes Going Forward - How volition the recent turmoil in addition to the proposed authorities activity play out inwards the diverse markets? Some things I'll hold upwardly watching going forward:

* Signs of risk-taking or risk-aversion: How practise emerging marketplace equities comport relative to U.S. stocks?

* Interest rates in addition to Commodities: Hard to imagine tightening moves whatsoever fourth dimension soon, given the vulnerability of the economy, only volition long rates in addition to commodities laid about to toll inwards farther inflation?

* Confidence inwards U.S. Dollar - If the U.S. authorities is taking on dodgy debt, volition investors desire to concur U.S. dollars, in addition to volition inflation expectations weigh on the dollar?

* Trader in addition to Investor Sentiment - Will the recent authorities activity boost view amid stock marketplace participants or volition nosotros laid about to encounter doubts that the rescue tin work?

Hard to believe in that location won't hold upwardly repercussions from the government's expansion of debt, including missed opportunities to reform social safety in addition to wellness attention in addition to express room to heighten spending on other priorities, cutting taxes, or tackle novel nation of war machine challenges.
.

Info!! Wtf With The Unloose Energy Stocks?

Materials, Industrials, Consumer Discretionary, as well as Consumer Staples sectors. Now it's the plough of the Energy stocks. Above nosotros run into the Cumulative as well as Five-Day Flows for v highly weighted stocks inside the sector, plotted against the Energy ETF, XLE. The v stocks included inward the analysis are XOM, CVX, COP, SLB, as well as OXY.

What nosotros run into off the bat is that Energy issues select been relatively stronger than other sectors, thank yous to commodity strength. Indeed, their nautical chart looks to a greater extent than similar the nautical chart for the Materials sector than virtually of the others for this reason. Note equally good that the recent marketplace weakness failed to select XLE below its Jan lows. This non-confirmation, which we've observed amid the other sectors equally well, has played an of import run inward the market's real recent bounce.

That having been said, nosotros did non run into a bounce inward XLE slow concluding week, owing to the commodity selloff. Moreover, Cumulative Money Flow for the Energy stocks has been inward a steady downtrend since August, 2007. Considering the historic forcefulness inward crude oil prices over this period, XLE functioning has been muted. Indeed, it appears that coin has been systematically coming out of this sector over time.

The five-day flows demonstrate that especially piffling upper-case missive of the alphabet flowed into the sector during the bounce from the Jan lows. That has fix the electrical current weakness. While the sector is make saltation as well as the non-confirmation of the Jan lows was encouraging, in that location is non nevertheless prove of pregnant funds flowing into liberate energy issues that would ability an upside breakout.
.

Info!! Wtf Alongside The Applied Scientific Discipline Stocks?

Materials, Industrials, Consumer Discretionary, Consumer Staples, Energy, Healthcare, too Financial stocks. Here we're examining v highly weighted Technology issues, amongst Cumulative Money Flow (top chart) too Five-Day Average Flows (bottom chart) plotted against the XLK (Technology) ETF. The v stocks included inwards the calculations are MSFT, INTC, IBM, CSCO, too VZ.

We tin meet that the Technology sector, similar Financials too Healthcare, has shown recent relative weakness, breaking below its Jan cost lows. Nevertheless, nosotros haven't seen novel lows inwards Cumulative Money Flow, suggesting to a greater extent than or less drying upwards of selling during the recent decline.

The lessened selling, however, has non translated into aggressive buying. We are exclusively modestly off the recent cost lows, too five-day coin flows convey remained negative. As amongst too then many of the other sectors, we've yet to meet sustained buying involvement that would Pb us to hold off a major modify of trend.
.

Info!! Wtf Alongside The Healthcare Stocks?

Materials, Industrials, Consumer Discretionary, Consumer Staples, too Energy sectors. Here we're examining v highly weighted stocks from the healthcare sector, amongst Cumulative Money Flow (top chart) too Five-Day Flows (bottom chart) plotted against the Healthcare ETF, XLV. The stocks included inward the analysis are PFE, JNJ, MRK, LLY, too AMGN.

Note that, dissimilar many of the other sectors, Healthcare shares convey been quite weak during the recent marketplace position decline, dropping to novel behavior marketplace position lows. This weakness was preceded past times steady dollar outflows from the sector: banker's complaint the steady downtrend inward Cumulative Money Flow. Not solely is the sector weak; at that topographic point are no signs at acquaint of a sustained stream of funds into these shares.

Five-day flows convey bounced a bit, exactly stay negative. Note how positive periods of five-day stream convey non been sustained, oft leading to subsequent toll weakness. Of the sectors, this is i that is relatively weak, both inward toll surgical operation too coin flows.
.

Info!! Sector Coin Catamenia In Addition To Other Trading Perspectives In Addition To Resources

*  Money flow, sector past times sector, is measured past times multiplying ETF cost past times the break of ETF shares outstanding in addition to tracking over time.  Since the rootage of the year, coin has flown out of SPY.  The consumer discretionary sector has seen the greatest per centum outflows; the utilities sector the greatest inflows, followed past times the 2 commodity-related sectors.  Sector rotation has dominated the yr to date, amongst small-scale caps in addition to NASDAQ shares lately underperforming large caps in addition to yield-related sectors (consumer staples, utilities) lately outperforming increment sectors (technology, consumer discretionary).

*  Useful links on sector functioning in addition to more from Abnormal Returns.

*  Hats off to the Macro Man weblog for first-class perspectives on markets in addition to macroeconomics, including this recent post on global influences on wage growth.

*  Into stock screening?  Here's a useful tool from FinViz.  Here's a useful tool from MSN. 

*  Worth a read in addition to a re-read:  what makes coin managers successful, from Howard Marks.

*  Nice illustration of scenario edifice in addition to preparation from SMB's Steve Spencer.

*  Influenza A virus subtype H5N1 pill for trading performance?  Here's a unique direction inwards the search for trading profits.

Further Reading:  Gaining Access to Inner Expertise
.

Info!! A Quick Review Of Stock Marketplace Pose Sectors

With Thursday's powerful rise, nosotros had 809 stocks across the NYSE, NASDAQ, as well as ASE register fresh 65-day highs as well as 1257 tape novel 20-day highs. By contrast, nosotros had 227 as well as 604 novel lows, respectively. While these numbers are below peaks recorded a few weeks ago, they're a meaningful turnaround from recent weakness. Demand, a mensurate of strong upside momentum, shut at 163; Supply at 24. That indicates that the ascension was broad, affecting the bulk of issues. This is equally good reflected inward the relative describe of the modest caps, amongst the Russell 2000 futures hitting a post-March cost high.

My technical describe mensurate is a method of quantifying cost trending deportment over a short-to-intermediate term fourth dimension frame. Here's how the S&P 500 sectors await at acquaint inward damage of technical strength:

MATERIALS: -160
INDUSTRIALS: -40
CONSUMER DISCRETIONARY: +220
CONSUMER STAPLES: +220
ENERGY: +180
HEALTH CARE: +280
FINANCIAL: -320
TECHNOLOGY: +340

What nosotros tin laissez passer on notice meet is that, equally a group, there's been a dainty turnaround from recent lows, exactly nosotros maintain to meet real mixed sector performance. The weakness inward the materials sector as well as the restrained describe of the liberate energy shares are especially noteworthy, equally commodities quest hold been surgical physical care for leaders of late.

Technology remains a surgical physical care for leader, which is consistent amongst my recent findings on coin flows. The big story, perhaps, remains fiscal shares, which maintain to lag badly. We've seen many steps taken to stabilize vulnerable banks, as well as these quest hold even as well as hence to interpret into meaningful, sustained confidence inward the sector. This remains a potential Achilles heel for the market's attempted recovery.

RELATED POST:

Money Flow Analysis