Wednesday, July 27, 2016

Equity sector behavior - Most trends still in place

Equity sector behavior has continued to perform well in July with the only exception energies (XLE), consumer stables(XLP), and utilities (XLU). The best performing sectors have been technology, materials, health, and consumer discretionary. Technology and consumer discretionary improved even though they have been at the bottom of our 1 and 3 month momentum measures. Prices are above short-term, medium, and long-term moving averages in most cases except for energy and finance. We also follow simple breakout rules for 20 and 40 day and find that most sectors sector showing prices above the look-back prices. 

Currently, there is no information to suggest a dislocation from the current trends. The markets are not at a crossroad.

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