Saturday, September 27, 2008

Sector Update for September 27th

The last sector review found more evidence of mixed performance and sector rotation. Here are the Technical Strength figures for the sectors as of the close on Friday. Recall that Technical Strength is a proprietary measure of trending that quantifies how well a price series follows an upward or downward path. Scores between +100 and -100 suggest little trending behavior; perfect trending behavior for each sector would be +500 or -500.

MATERIALS: -80
INDUSTRIAL: -220
CONSUMER DISCRETIONARY: 0
CONSUMER STAPLES: -40
ENERGY: +20
HEALTH CARE: +20
FINANCIAL: +220
TECHNOLOGY: 0

Notice that the majority of sectors are trading in a trendless manner. We appear to be in a holding pattern, awaiting the details of the government's rescue package. We see some weakness in Industrial issues in anticipation of recession and some strength in Financial stocks, perhaps partly due to the ban on short selling. The S&P futures are trading in a wide three-day range; it appears that we are setting up for a significant range breakout.
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1 comment:

Jeff Pietsch CFA, Esq said...

Brett, I have found it disconcerting that the Nasdaq 100, mostly free from the financial bounce on "bailout" speculation, has been doing so very poorly. It was the recovery "hope" darling just a couple months ago. I suspect it may say more about the fundamental view of our economy. Regards, Jeff