Wednesday, September 23, 2015

Are Stocks Rolling Over? (excerpt)

Chart technicians are turning increasingly bearish. That’s largely because the S&P 500 was losing its upward momentum earlier this year and mostly moving sideways as its leadership narrowed. If it continues to move sideways following the latest correction, the 200-day moving averages of the S&P 500 and its 10 sectors might start to roll over. A few technicians are already saying the market is making a major top and entering a bear market.

I am a meat-and-potatoes fundamentalist with a drizzle of quant to enhance my meals. However, I will stay for dessert to chat with technicians. In any event, I am monitoring the 200-dmas of the S&P 500 and its 10 sectors more closely. There certainly is some rolling over going on, especially for the two most globally sensitive sectors, namely Energy and Materials. The interest-rate sensitive sectors are also looking a bit toppy, particularly Telecom Services and Utilities. On the other hand, the sectors with most of the market capitalization in the S&P 500 remain on 200-dma uptrends, particularly Consumer Discretionary, Consumer Staples, Health Care, and IT.

Today's Morning Briefing: Sand Castle. (1) Sand on sale. (2) Some things are different about latest bubble. (3) Circle of Life: Bubbles inflate and burst, triggering financial calamity and recession. (4) Endgame beginning or nearing an end? (5) Lower depths? (6) Supply and demand in the oil market. (7) Currencies on the run. (8) Lots of demand for autos. (9) Can stocks decouple from commodities? (10) Some 200-dmas are rolling over, others are not. (More for subscribers.)

No comments: