Sector Update for December 20th

Last week's sector review found a mixed picture of Technical Strength, with several sectors trading in short-term uptrends and others in downtrends. This was consistent with a picture of sector reallocation, where the overall market averages were rangebound, but money was coming into some sectors and exiting others. That picture continues again this week, only we see the majority of large cap sectors--five of the eight that I track weekly--trading in neutral territory, with no significant directional bias.

This once again highlights the rangebound nature of the current market. Two sectors that were strong the prior week, Industrial and Technology shares, weakened this past week, but Financial stocks remain the relative strength laggard, as they have been for a number of weeks running. Here's how the sectors looked as of Friday's close:

MATERIALS: -80
INDUSTRIAL: 60
CONSUMER DISCRETIONARY: 160
CONSUMER STAPLES: -120
ENERGY: -80
HEALTH CARE: -20
FINANCIAL: -240
TECHNOLOGY: 60

We can see that none of the sectors is showing a significant uptrend; only Financial shares show meaningful weakness. I notice that both Financial and Consumer Staples ETFs (XLF, XLP) hit longer-term support levels on Friday before bouncing higher. I will be watching those sectors closely early this coming week for signs of breakdown vs. turnaround.

As always, I'll post updated trend and market strength/momentum data each morning prior to the market open via Twitter (follow the Twitter stream here).
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