From the desk of Willie Delwiche.
Taking Out The COVID Lows
US industry group trends are at a new low for the year and are approaching washed out levels. Take out the Energy groups and virtually nothing is in an up-trend.
The Details: The industry group trend indicator looks at 4 weekly trend metrics for each of the 72 industry groups in the S&P 1500 (24 each for small-caps, mid-caps and large-caps). The higher the number, the broader the strength at the industry group level.
More Context: From an industry group trend perspective, this is as bad as it got during COVID and during the bursting of the Tech Bubble. It was worse than this during the Financial Crisis (both during October 2008, which was not the low and March 2009, which was the low). We cannot know how bad it will get this time and so rather than anticipating a turn higher and improving conditions, I would rather wait for evidence of a turn and follow the trend higher.
We take a Deeper Look at what would give us confidence that a turn higher for stocks could be sustainable and where we are already seeing evidence of improvement.
