US Sector Update: Friday, February 1, 2013

If you have read our recent posts, you know we are still very bullish for the long-term trend, but many items are moving into a zone that often precedes a market lull or correction.  We are starting to see some of those same signs in our sector observations.

Industrials, Basic Materials and Healthcare are still near the top of our list.  We have seen some softening in the action of some Basic Material stocks in the last few weeks, which is obvious in the charts shown below. 

The larger-cap Industrial stocks are still doing well, and Caterpillar's forecast this week gave them a further lift.  However, the "average" Industrial stocks are showing some tendencies to slow their recent ascent. 

The best trends in the last few weeks have come from Healthcare and Energy, although much of the Energy stocks' gain still looks like the initial bounce after a long snooze.

Don Hays, Justin Wood and Daniel Petzold

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