posted on 06 March 2017
Data Analysis Of The Market and Sectors For Traders
S&P 500 Tear Sheet
The “Tear Sheet" below is a “reference sheet" provide some historical context to markets, sectors, etc. and looking for deviations from historical extremes.
If you have any suggestions or additions you would like to see, send me an email.
Technology, Discretionary, Industrials, Staples, Utilities, Materials, Health Care, and Financials continue to push highs. Energy continues to struggle after breaking its 50-dma BUT did find support at the 200-dma last week.
Notably, Utilities, Healthcare, and Staples just had the 50-dma cross back above the 200-dma suggesting a much better buying opportunity on sector pullbacks in the future.
The extreme deviation from the 200-dma in Discretionary, Technology, Industrials, Materials, and Financials suggest more underperformance risk currently until that is corrected.
Overbought conditions exist unilaterally across the entire complex suggesting a higher risk/reward opportunity currently until a correction occurs. Not adding any new exposure currently for this reason.
From the broader index positioning:
Small Caps, REIT’s, Mid Caps, and Dividend Stocks, International, are all extremely extended above their longer-term moving averages suggesting a higher degree of risk.
Like Utilities, Staples and Healthcare above, watch REIT’s where the 50-dma is just about to cross above the 200-dma which should provide for additional support for the sector.
Bonds had a rough week following the Presidential speech but are continuing to struggle with current support. The overbought short-term condition in bonds has now been reversed so look for a money flows INTO bonds in the next couple of weeks as the market goes through a correctionary phase.
The table below shows thoughts on specific actions related to the current market environment.
(These are not recommendations or solicitations to take any action. This is for informational purposes only related to market extremes and contrarian positioning within portfolios. Use at your own risk and peril.)
After hedging our long-equity positions 12-weeks ago with deeply out-of-favor sectors of the market (Bonds, REIT’s, Staples, Utilities, Health Care and Staples) we did rebalance some of our long-term CORE equity holdings back to original portfolio weightings harvesting a bit of liquidity.
The short-term bullish trend is still very positive which keeps us allocated on the long-side of the market. HOWEVER, the technical setup required for an increase in equity risk in portfolios currently is NOT FAVORABLE currently.
We continue to maintain very tight trailing stops as the mid to longer-term dynamics of the market continue to remain very unfavorable as well.
Rebalancing remains strongly advised.
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