In our sector studies, we are most definitely seeing a slowing trend of relative strength by the Consumer Discretion sector, and for the first time in many months, we have reduced this sector's recommended weighting to only a market weighted position. You can see this trend in the charts below.
At the same time, the Financials sector, that had been on a steady trend of seeing the banking part of the sector show dramatic improvement, is starting to see that area lose some of its upward momentum. However, insurance stocks are showing better trends in general, and REITs are still very solid.
From the other side of the ledger, the long-beleaguered economically sensitive Industrials sector is experiencing dramatic improvement. Technology - especially the equal weighted stocks - is also showing some bounce in the last few weeks, experiencing the best gain of all sectors during the latest month. It is indeed, however, playing catch-up, since it had been dragging badly until the latest rally.
Don Hays, Nicholas Warf & Justin Wood
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