Sector Update for April 18th

Last week's sector review noted, "As long as pro-risk themes are dominating and the majority of sectors are displaying Technical Strength, it is premature to fade this rally for anything more than a short-term trade." Those themes did continue to hold sway this past week, as stocks added to their gains.

A look at Technical Strength for the eight S&P 500 sectors that I track each week continues to find trend strength across a variety of sectors. Recall that Technical Strength is a measure of short-term trending, varying from +500 (strong uptrend) to -500 (strong downtrend). Values between -100 and +100 suggest no significant directional movement.

MATERIALS: +440
INDUSTRIAL: +380
CONSUMER DISCRETIONARY: +380
CONSUMER STAPLES: +240
ENERGY: +60
HEALTH CARE: +100
FINANCIAL: +400
TECHNOLOGY: +320

Once again, the more defensive health care and consumer staples sectors , along with energy, are weaker than the materials, financial, industrial, and technology groups. Overall, however, sectors remain in a bullish mode, though we do see some evidence of a slowing of the uptrend among market indicators and in some moderate rotation in the above groups. As before, I would want to see some evidence of a shift in the themes of the last two weeks before taking an outright bearish stance on this market.
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