Info!! Sector Update For February 22Nd

Last week's sector review concluded, "Clearly we've weakened since final calendar week as well as forthwith are testing major back upward inwards the 800 expanse of the S&P 500 Index. We unopen Fri with novel 20-day highs across the NYSE, NASDAQ, as well as ASE at 492; novel lows were 596. As long every bit nosotros cannot sustain a plurality of novel highs, I await the marketplace position to breach that 800 order as well as examination the acquit marketplace position lows of November."

We did, indeed, sustain a plurality of novel lows as well as convey moved toward the Nov lows on potent selling pressure. As noted inwards my recent post, the over 4000 novel 20-day lows observed on Fri was a order of weakness seen alone xi times since belatedly 2002.

As nosotros expression at the Technical Strength of the viii S&P 500 sectors that I follow each week--a proprietary short-term stair out of trending--we tin dismiss run across farther show of this wide weakness:

MATERIALS: -440 (14%)
INDUSTRIAL: -440 (2%)
CONSUMER DISCRETIONARY: -440 (8%)
CONSUMER STAPLES: -180 (15%)
ENERGY: -440 (0%)
HEALTH CARE: -360 (31%)
FINANCIAL: -480 (1%)
TECHNOLOGY: -340 (11%)

Recall that the Technical Strength of each sector varies from -500 (very potent downtrend) to +500 (very potent uptrend), with values of -100 to +100 indicating no important trend. As nosotros tin dismiss see, the sectors are to a greater extent than oft than non inwards a strongly downtrending mode, with alone the defensive Consumer Staples grouping showing less weakness. In the recent past, such highly negative readings convey represented oversold weather condition that convey led to short-term rallies.

When nosotros expression at the percent of stocks inwards each sector closing higher upward their 20-day moving averages (in parentheses), every bit noted yesteryear Decision Point, nosotros give away that all sectors exhibit fewer than one-half of their components higher upward that benchmark. Only the defensive Health Care sector shows a meaningful percent of issues higher upward their moving averages. The Energy sector has shown detail deterioration inwards the final week, as well as Financial issues are notably weak.

In sum, nosotros give-up the ghost on to run across wide marketplace position weakness, though a bounce from oversold weather condition would non endure surprising. It is non only the weakness, but the blueprint of sector weakness--with relative forcefulness inwards defensive sectors as well as relative weakness with economically-sensitive ones--that suggests that nosotros convey soundless to plow the corner on the bear.
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