SectorVue weekend comments for Monday of June 15th , 2009
Watch your Step
The Dow Jones closed up 36 points while the NDX slipped 3 points. All the broad based
stock indices had negative Action for the week which means the wheels are slipping.
Sector Action for the week was minus 369 with 23 Sectors up and 12 down. Our Market
Barometer topped out on May 5th at very overbought levels and made a lower high on
June 2nd.
Rydex Alerts- Holding Bearish Russell.
Short term Trading indicator- overbought
Market Breadth - Breaking down for the first time in weeks.
INTERMEDIATE TERM TRENDS- Still bullish however Interest Rates TYX and Commodities
have the steepest up trends.
INTERMEDIATE OSCILLATOR - Overbought Sell May 5th. Still overbought.
With the stock market bouncing from the deeply oversold ditch many participants are taking the
‘happy pill’. This despite the market being down 20% over the last year. It is difficult for me to see
market action over the past several years as anything but a Trading range. In fact a monthly chart
makes the Trading range description look generous as the Dow Jones is down 38% from October
2007 highs and has made zero headway since closing near 11,000 in 2000. Most investors would
feel lucky if we rallied to that number in the next year or two.
Utilities UTY- Number one in overall rank with a huge jump in overall rank and some price
movement. All of the sudden institutions are dumping money into this sector. Partially
economically defensive partly for the high dividends.
Pharmaceuticals DRG- another jump started sector. With the swine flu scare
Governments are recognizing the need to stockpile medicine and make it available to third
World Countries. Isolation is not possible any longer.
Gold XAU- falling in rank and down 11% since we took profits and issued a Sell a few
weeks ago.
Ultra ETF’s- Narrow summer like daily ranges.
Internet DOT - fell into the lower ranks. Google GOOG was down every day last week
and is off 5% from recent highs.
Housing HGX - Still dead last in overall rank. This allows me to chuckle every time I hear
someone say the housing market is bottoming.
REIT’s - also fell into the lower ranks. Commercial Real Estate is just now catching the
de-leveraging flu but the damage may eventually be greater since no one ‘needs’ an office
building as they do a home.
SectorVue and Rydex alerts are for educational purposes only and do not constitute 'investment advice'. No
representation is made that strategies will produce a profit.
There is risk of loss in all trading.
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