Info!! Sector Update For August 23Rd

Last week's sector update emphasized rotation in addition to a wide topping procedure inward stocks. Monday's weakness was followed past times a bounce on Tuesday in addition to a reversal of subsequent weakness early Wednesday, which kept us higher upward Monday's lows. After that, it was off to the races, equally stocks moved steadily to novel bull marketplace position highs.

Recall that Technical Strength is a proprietary mensurate of short-term trending. It tin give the axe endure conceptualized equally akin to a regression line, where tendency is a component subdivision of both gradient in addition to goodness of fit. As you lot tin give the axe run across from the nautical chart above, nosotros stimulate got seen neutral or bullish tendency readings across the viii S&P 500 sectors since the early July lows. Indeed, the nigh recent week's information (orange bars above) present an improvement inward tendency to the upside. That is non what nosotros typically run across inward markets that are topping out. Thus far, stocks stimulate got shown describe and, equally noted inward this past times week's tweets in addition to weblog posts, an impressive mightiness to bounce dorsum from short-term weakness. That suggests that coin on the sidelines has been aggressive inward using weakness to abide by skillful long side entries.

Here is how the Technical Strength readings sorted out past times sector equally of Friday's close:

MATERIALS: 380
INDUSTRIAL: 420
CONSUMER DISCRETIONARY: 360
CONSUMER STAPLES: 340
ENERGY: 400
HEALTH CARE: 340
FINANCIAL: 400
TECHNOLOGY: 320

Technical Strength varies past times sector from a maximum high of +500 (strong uptrend) to a minimum depression of -500 (strong downtrend), with values betwixt -100 in addition to +100 suggesting no pregnant directional movement. Note the consistent bullish readings across the sectors, with notable week-over-week improvement inward sectors that reverberate economical strength: materials, industrial, energy, consumer discretionary, in addition to technology. Clearly the marketplace position is reflecting favorable economical reports in addition to signals, anticipating continued recovery.

All that having been said, it is non clear to me that the recent highs are non component subdivision of a wide topping process. Of the xl stocks inward my handbasket that teach into the sector readings, entirely eleven made fresh bull marketplace position highs on Friday. We run across novel highs lagging alongside the wide universe of NYSE, NASDAQ, in addition to ASE shares equally well, equally my tweets on Friday indicated. If, indeed, nosotros are to run across toppy action, that should get early inward this coming calendar week with notable weakness across sectors. If nosotros produce non run across such weakness, it agency that nosotros are accepting value at higher toll levels which, of course, is what bull markets do.
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