Sunday, June 14, 2009

Sector Update for June 14th


Last week's sector review found that industrial and consumer stocks were showing Technical Strength, reflecting hopes of economic recovery. This week we see a pullback in the short-term trending of those sectors, as only technology shares gained strength on the week. A look at the status of each of the sectors as of Friday's close shows that only energy and tech shares are demonstrating robust uptrends. The remainder are quite close to neutral levels, suggesting range bound market conditions:

MATERIALS: +200
INDUSTRIAL: +140
CONSUMER DISCRETIONARY: +100
CONSUMER STAPLES: -20
ENERGY: +280
HEALTH CARE: +140
FINANCIAL: +120
TECHNOLOGY: +320

Despite a new high close in the large cap indexes, many sectors are not participating in the strength. I will be tracking the Technical Strength (short-term trending) of the stocks in my basket, as well as 20-day new highs/lows with daily updates via Twitter (follow here). As long as we're making fresh price highs, it's difficult to be outright bearish on the market, but the way the market has been making those highs has been less than inspiring and does not have me chasing strength.
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1 comment:

Watson said...

Hi Brett,

How quickly do you anticipate the bear market to come if your prediction and analysis are correct? Would you care to speculate on a time period?

From your analysis, in the coming two weeks if the number of stocks participating in the rally stays at or drops below its current level, this would be a confirmation of the impending bear market? How would you adjust your trading in both scenerios ( confirmation or non-confirmation of your prediction)