Hot & Cold Online Trading Sector Performance

Ralph April 5th, 2008

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Last weekend we stated “… it appears that all the clues are pointing to upside next week, suggesting we may have made the bottom at least for a little while” and we got that upside, 95% of which all occurred in one day, Tuesday.  The market shot up on that day and hit the now well established resistance zone (for the Dow Jones Industrial Average 12,650 to 12,750) and spent the rest of the week consolidating in that area, like a bunch of balloons trapped in the ceiling of a room.  A lot of energy is being built into that zone and if it can be penetrated to the upside next week it should convert to some stout support for a while.

What happens in a resistance zone is very hard to predict but there are some slight clues suggesting any upside attempt will fail next week. First of all the volume on Tuesdays advance was very lack luster so OBV (On Balance Volume) for most indexes is NOT confirming this recent advance. Secondly, overall market breadth for the week was very strong, in the order of about +65%. Normally this would be a good sign but this is about the exact same reading as we had on week ending February 1 which would have been a great time to be heavy short or in puts. All in all, we’re not seeing strong clues for a push through resistance next week and even if it does happen we see it as likely to fail in the weeks to come (barring any new evidence of real strength).

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We had previously published the weekly reports live on this blog but decided to step up our generosity another notch and give it away in an excel format (we previously charged $5 for this) for FREE from now on!  The feedback we’ve been getting from our customers is that the Excel format is much more user friendly than the blog format.

This week we had about 24 sectors with +100% breadth. It’s been a while since we’ve seen that. Utilities, Transportation, Oil and Homebuilders are some of those sectors. Also, the broadest based buying was seen in Energy, Materials, Semiconductors, Retail, Real Estate among many other sectors. There really weren’t any sectors that had much selling last week, at least on a breadth basis. In fact, only 9 sectors had less than 0% breadth which is a very strong sign.

We invite you to learn more about the huge advantage breadth analysis gives you as a trader or investor. As you can see in the table above we track 11 Major US Stock Market Indexes and Averages, 23 important Exchange Traded Funds (ETF’s) and all of the widely followed Hemscott Financial Data North American Industry Groups. These groups are easily tracked within the award winning Worden Brothers Stock Market Trading Software Telechart. This software works perfectly with this report, we suggest you give it a try!

If you’d like to receive any previous Weekly Sector Breadth Reports just let us know!

Good Trading!

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