We've seen Industrials and Basic Materials perform quite strong over the last several weeks, while Healthcare has tapered off slightly. The Financial stocks have developed a little bit of a dysfunctional character in their relative strength as the larger-cap stocks have widened the gap in the performance race over their smaller-cap cousins, which you can see in the chart below. Much of this is probably due to the extremely negative previous performance of the large-cap banks, as they now play catch-up.
Like the Financial stocks, the Consumer Discretion sector has a segmented personality as the large-caps are still doing well, while the mid and small-cap stocks are not enjoying the same measure of the bullish move. Also, Technology is really a mixed bag as the sector has lost the very powerful leadership of Apple. Apple with a few other large-cap Tech stocks are weighing down the sector, but at the same time, the equal weighted action is showing very nice gains. On the other hand though, Energy continues to encounter obstacles as many of these stocks cannot quite seem to break out of the pack.
Don Hays, Nicholas Warf & Justin Wood
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