20130607 Moving Average Breadth
The markets put in a bullish reversal this week. There is a of talk about whether it was enough to reset things or not. We barely made to 5% down before buyers started coming back in right where they should have. It almost seems too easy (and it might be), but technically it makes sense. Part of the reason it seems too easy is because of the noise that gets louder and louder with every percentage point we move down. However, if you listen to your data and not CNBC you would have noticed the breadth figures were getting stretched to the downside if we are in fact still in a larger time frame uptrend. Many including myself mentioned the McClellan Oscillator hitting extremes mid week; now let’s see how the moving average readings painted the picture. In my book it looks like we got some decent reversals here too. Technology held up exceptionally well while Industrials and Financials hit oversold and bounced on cue. .
First, the Total universe of 1898 companies posted over the $SPY
Next I split the universe into 10 custom broad sector indexes
Consumer Discretionary (325)
Consumer Staples (91)
Energy (132)
Financials (316)
Health Care (199)
Industrials (252)
Materials (148)
Technology (338)
Telecom (24)
Utilities (73)
These are custom indexes so you cannot invest directly in them, but there are plenty of ETFs available for each sector. For me personally this is another form of relative strength, just with a broader lens .
Good Luck! It is there for you to make.
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