Time for a look at our ‘vs. SPY’ sector views, using weekly charts today. These tell the longer-term trends of the various sectors in relation to the S&P 500 AKA broad (large cap) market. The qualifier once again is that this is not TA, it is trend comparison.
The already down trending Financials have been impaired by the recent down moves in longer-term Treasury yields. Energy has maintained its robo-downtrend vs. SPY despite the rebound in oil prices (which have by the way recently hit the underside of our rally targets). The relatively defensive Healthcare sector is not surprisingly under performing as Junk bonds hit new highs and risk is coaxed ‘on’ by the dovish Fed. The reflation-sensitive Industrials and Materials stink relative to SPY and Tech can be viewed as opposite to the defensive Healthcare; Tech is offensive and leading this rally.
REITs have been good since interest rates topped in October-November, defensive Utes are also on the declining interest rate bid, Transports suck (and are by the way, a negative divergence to the Dow), Biotech has robo-trended slightly down, Medical Device as seemingly always is up and Retail is lame in relation to the broad market.
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