After doing my U.S. Sector and Sub-sector review, there is a common theme that I think is worth pointing out. Structurally speaking, things now look worse. The best sectors that had been leading are now breaking uptrend lines and key support. Meanwhile, the laggards continue to hit new lows. Things overall have worsened in my opinion.
Now, short-term we had a lot of very specific downside targets in most sectors coming into the new year. Over the past week and a half I would say that a very large majority of the S&P sectors and sub-sectors have now achieved those downside objectives. I’ve been very clear about where we want to cover tactical shorts and they are detailed in the Chartbook. Going forward we would much rather be sellers of strength, than buyers of dips, although there are a few exceptions.
Here are my notes from this week’s sector review: [Read more…]