US Sector Update: Friday, March 30, 2012

It is definitely volatile in "Sector Land."  We witnessed a big broad move up in most economically sensitive sectors in January, but since then, it has been a different ballgame.  For instance, Healthcare had been losing steam, and it still is from a longer-term perspective, but as the Supreme Court deliberations have put the spotlight on Obamacare, we have seen a short-term spike in the percentage of Healthcare stocks that are trading above their 50-day moving average.  (I discussed the Healthcare sector this week in an interview with Matt Nesto of Yahoo! Finance's Breakout blog, which you can watch by clicking here.)

Then we see, on the other hand, a lot of weakness in the economically sensitive Industrial and Energy stocks, but continuing strength in Consumer Discretion stocks.  Tech stocks have also been doing well, and the big laggard - Financials - has been soaring.

Looking at the broad market briefly, you can most definitely see in the chart below the slow steady loss of upside momentum in recent weeks, as fewer and fewer stocks are trading above their 50-day moving average.


But back to the sectors, while we're still witnessing a lot of non-confirmation between large-cap and mid-cap sectors, in general, the winners right now are Financials, Consumer Discretion and Technology.

Don Hays

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