Sector Update for July 29th

Last week's sector review noted that the bullish intermarket themes were in unison, with impressive breadth to the market rally. That strength has carried over to the most recent trading week, as most of the sectors have retained positive Technical Strength readings. Recall that Technical Strength is a quantification of short-term trending, with +500 representing a very strong uptrend; -500 a very strong downtrend; and scores between -100 and +100 suggesting no significant trending. As we see above, all of the sectors are in uptrends with the exception of financial shares. The health care sector is leading the pack in relative strength:

MATERIALS: 280
INDUSTRIAL: 200
CONSUMER DISCRETIONARY: 220
CONSUMER STAPLES: 240
ENERGY: 160
HEALTH CARE: 360
FINANCIAL: 60
TECHNOLOGY: 280

With new 20- and 65-day highs continuing to outpace new lows and advance-decline lines for the major averages in new high territory, the health of the uptrend remains strong. It would not be surprising for traders and investors to use pullbacks in Technical Strength as buying opportunities, given the increasingly common belief that the S&P 500 Index will vault above 1000 before there is any correction of significance. I will be tracking the indicators daily via Twitter to assess the strength and momentum of the market (follow here).
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