Info!! Sector Update For September 7Th

What a difference a calendar week makes. The final sector update institute the bulk of sectors inward small-scale uptrends, amongst testify of sector rotation rather than strong upward trending. Over the by week, money has continued to menstruum out of stocks too most of our sectors stimulate got flipped from small-scale uptrends to small-scale downtrends. What this agency inward utilisation is that I'm viewing the marketplace through ii sets of lenses. One is the lens of the short-term trader, who is seeing the marketplace weaken from solar daytime to day, calendar week to week. (By Friday, for example, nosotros posted over 2400 fresh 20-day lows amidst NYSE, NASDAQ, too ASE issues; a total indicator review volition look tomorrow AM and, equally always, I volition travel updating the indicators prior to each trading solar daytime potentially meaning divergences betwixt the electrical current marketplace activeness too the weakness that nosotros saw at the July lows. In short, we're seeing more fearfulness too selling than inward the by few weeks, precisely fewer stocks are participating inward that selling than at recent marketplace lows.

So basically nosotros stimulate got ii scenarios: the kickoff is that we've begun a fresh leg downwards inward the marketplace too volition decisively accept out the July lows across the major indexes. The 2nd scenario--and, frankly, the 1 I'm leaning toward--is that the July through early on September weakness is business office of a bottoming process, amongst waning participation to the downside.

Here are the Technical Strength (trending) numbers for each of the 8 S&P 500 sectors that I follow, amongst the pct of stocks inside each sector trading higher upward their 50-day moving average (in parentheses):

MATERIALS: -80 (40%)
INDUSTRIAL: -200 (20%)
CONSUMER DISCRETIONARY: -100 (57%)
CONSUMER STAPLES: +40 (61%)
ENERGY: -460 (5%)
HEALTH CARE: -240 (30%)
FINANCIAL: +240 (64%)
TECHNOLOGY: -320 (19%)

We tin come across that the unloose energy too technology scientific discipline shares are dramatic underperformers, equally the marketplace is pricing inward the effects of slow/no increase inward the economy. Consumer staples stocks are outperforming equally defensive issues, but--interestingly--we're too seeing underperformance amidst wellness assist shares. That may reverberate renewed concerns nearly cost-cutting inward that expanse inward the wake of the Presidential election. Amazingly, fiscal shares are leading the pack; it volition travel interesting to come across how they response to the regime bailout of FNM too FRE.

Note how the percentages of stocks higher upward the 50-day moving averages is quite discrepant across sectors: in 1 lawsuit again, we're seeing enough of sector rotation. At this point, the percentages are non nigh levels ordinarily associated amongst intermediate-term marketplace bottoms, despite the fact that we're at fresh annual lows inward the NYSE Composite Index too nigh those lows inward the S&P 500 Index. This is however unopen to other reflection of the divergences I'm seeing inward the electrical current market. Either nosotros stimulate got much farther to larn on the downside, or the bulk of shares stimulate got set inward their lows for the electrical current comport cycle. I'll travel tracking the indicators closely to handicap the odds of these really dissimilar scenarios; remain tuned...
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