“The US market opened lower to start the week, continued lower for much of the holiday shortened week, and ended giving back all of last week’s gains. For the week the SPX/DOW -1.9%, and the NDX/NAZ were -2.1%. Asian markets gained 1.8%, European markets lost 0.7%, and the DJ World index lost 0.7%. On the economic front positive reports continued to outnumber negative reports: 7 to 2. On the uptick: Case-Shiller, new/pending home sales, new home prices, the Chicago PMI, the WLEI and weekly jobless claims improved. On the downtick: consumer confidence, and the monetary base. Next week the monthly Payrolls report, ISM and Auto sales. Best your week!
With the bull market stumbling we decided to take a look at the leading sectors that have supported this bull market. Leading sectors shift from one group to another group in alternating bull markets. This bull market’s leaders have been the Techs and Industrials, naturally, plus Consumer discretionary (XLY) and staples (XLP).
Typically when a bull market nears its end, the leading sectors are usually displaying five wave patterns up, from the bear market lows, and then start to head lower. A quick review of XLY, XLP and the NDX for techs displays this potential pattern. The industrial DOW will follow shortly…”
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