The markets snapped back once again this week with all the majors making new closing highs except $IWM. The moving average readings are moving back higher without significant damage, but so far are lagging price. This is not surprising to me as my theory is Institutions will favor larger and higher price stocks as they chase into the end of the year. It is easier to place big money in these without making big waves. That said, we did see improvement across the board and the “potential” divergences are just that (potential) until we see another peak. Indicators often start a move slow then play catch up as the move extends. All in all we are still in a strong market with strong breadth and strong probabilities into the end of the year. I continue to expect dips to be short and sharp until proven otherwise.
Don’t forget to check out the new weekly feature Probing The Universe
I have decided to leave the $SPY chart on just to give a comparison to the universe.
First, the Total universe of 1898 companies posted over the $SPY
Universe Composite Index
Next I split the universe into 10 custom broad sector indexes
Consumer Discretionary (325)
Consumer Staples (91)
Health Care (199)
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.