Wednesday, November 07, 2007

Weakening Stocks: A Sector by Sector Look

Here's a quick update of some of my indicators. The Wednesday drop affected the Technical Strength numbers for the 40 S&P stocks that I track across eight sectors. We have 5 issues qualifying as strong, 4 and neutral, and 31 as weak. This gives us a weak Technical Strength Index of -1820. Looking sector by sector, we have these Technical Strength scores:

Materials: -260

Industrials: -300

Consumer Discretionary: -240

Consumer Staples: -100

Energy: -220

Health Care: -280

Financials: -460

Technology: +40

Among NYSE common stocks, we had 83 new 52-week highs and 228 new lows. That's the most new lows since the August bottom. Among S&P 600 small caps, we had 6 new highs and 104 new lows. That's the most new lows since the weakest day in August. Among the S&P 400 midcaps, we had 12 new 52-week highs and 53 new lows. That's also the highest level of new lows since August--and very close to the August nadir.

All in all, we have 33% of NYSE issues and SPX issues trading above their 50-day moving averages; we've tended to see intermediate bottoming begin when that number has been below 30%. The numbers are weak and have been weakening. It's when we see markets make fewer new lows on increasing technical strength that buying weakness makes sense. We're not there yet.


My Previous Look at Technical Strength

Last Week's Indicator Readings