I’ll have you know that 14 out of 15 market indicators that I watch are negative. The last hold out is the percent of NYSE stocks that are still in a positive trend. As of last Thursday, that number was 43%, but down from 45% the prior week. It was 50% on 06/09/08.
On Friday, another indicator rolled over: the percentage of stocks on the NYSE that are trading above their 30-week MA. This is a major red flag because it is looking at a longer term trend. The number fell to 42%, from 46% last week, and 50% two weeks ago. It is signaling an extended breakdown in the market.
Consumer Staples [[XLP]] $27.08: Bearish. Momentum has been negative for eighteen days after weakening all last week. Also has lost momentum on a three week time frame and now a five month time frame. Relative strength weaker than the market. This one is rolling over.
Consumer Discretionary [[XLY]] $29.98: Bearish. Broke down through a spread triple bottom on Friday. Weekly momentum has been negative for the past four weeks. Relative strength weaker than the market. Good area to screen for short ideas.
Energy [[XLE]] $85.75: Neutral. Weekly momentum has been negative for the past 4 weeks, and negative four of five day last week. Relative strength stronger than the market, however caution is the name of the game for this sector.
Financials [[XLF]] $22.18: Bearish. Don’t even bother to go long here. It’s definitely for asshats. Continuing deterioration.
Health Care [[XLV]] $30.00: Bearish. Double bottom breakdown pattern in mid-March and doesn’t show any signs of a reversal. Weaker RS than even the weak market.
Industrials [[XLI]] $35.90: Bearish. Broke a double bottom on Friday.
Materials [[XLB]] $43.42: Neutral. Showing weakness.
Tech [[XLK]] $23.75: Bearish. No cylinders are firing. Blew a head gasket on Friday. It’s OK to mock anybody on CNBC who recommends this sector.
Telecom [[IYZ]] $24.49: Bearish. Can you hear me now?
Utilities [[XLU]] $40.67: Bullish. Broke through a double top. Weakening momentum, though.
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Leveraged ETFs – Best Ideas
Last week, I mentioned [[SZK]], which closed last Monday @ $73.30. It has now broken through a triple top, as the consumer is getting whacked. This is still a good opportunity to get long here since it is still early in the game, as the consumer will eventually be turning in aluminum cans for money. Momentum has started to turn positive the past 7 trading sessions.
I continue to like: [[DBA]], $40.10…[[USO]], $109.14….[[GSG]], $$72.20…[[SKF]], $134.03
Disclaimer: This information is not intended to be used as the primary basis of investment decisions. Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. The author may have a position in one or more stocks mentioned here. Trade at your own risk.
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