With the market near all-time highs again, which sectors are the strongest and which are the weakest?
Let’s update our Color Sector Strength Grid and pinpoint broader trends and current leadership:
We’re seeing our Color Sector grid of the nine major AMEX Sector SPDRs (ETFs).
The top six sectors are classified as “Offensive” or Aggressive (bullish) sectors while the bottom three are the “Defensive” or Conservative sectors.
A quick glance shows us which sector just made a new high – it’s Health Care (XLV).
Health Care is closely followed by a strong performance in Consumer Discretionary (XLY) with Industrials (XLI) not far behind.
The color algorithm shows two sectors on a green bullish bar at the moment: Financials (XLF) and of course Health Care (XLV).
All other sectors are flashing a red bearish bar, except Discretionary (XLY) which reveals a white neutral bar.
The weakest sectors – not surprisingly – include Energy (XLE) on the heels of the collapse of Crude Oil and Utilities (XLU) which is an interest-rate sensitive sector.
This is just a quick grid comparison – use this as a springboard for additional analysis and focus on trading strong stocks in strong sectors (or short-selling weak stocks in weak sectors).
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade