20131227 Strength In Numbers Executive Summary

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20131227 Strength In Numbers Executive Summary

for the full report see here

Total Market:

  • Breadth expanded nicely this week negating many divergences and solidifying support for the market’s move.
  • Short term indicators have flipped and are now near highs, but no extremes yet. volatility likely to increase while it resolves. These are notorious for divergences
  • May to present still looks like a rotational or “running” correction has been playing out; if so this leg will be larger than most predict.
  • No signs of breadth deterioration that usually accompany major topping patterns. Uptrend remains on solid footing.

Broad Sectors:

  • Sector structure is optimal for strong markets with cyclical sectors continuing to lead and show strong breadth while doing it..
  • Consumer Discretionary, Consumer Staples, Financials, Health Care and Technology saw AD Lines all in new highs this week. which is a huge chunk of the overall market capitalization.
  • McClellan Summation Indexes are sending an important message with all sectors crossing and moving higher this week.
  • Basic Materials is the Sector Highlight as it made a nice move after last week’s mention

What We are Watching:

  • Continued barbell effect with Large Cap Growth and Small Caps in general outperforming.  $QQQ $DIA $IWN $IWM
  • $DIA can surprise if we have new leg up with traditional names you know perking up everywhere.
  • Sector concentration should stay with Technology, Industrials, Financials and Consumers until the show any signs of weakness. If economy is stronger than most think, these areas will continue to surprise.  $XLK $IYC $IYK $IYJ $XLF
  • Basic Materials is a top pick for 2014 with Industrial Metals getting a head start. Sector ETF RS Rankings is worth a look here with $XME $PKB $FXZ $RTM in the top slots.

Thanks for taking the time to review this report.  If there are improvements I can make, I would love to hear them.

Good Luck this week.  Luck is there for the making!

G. Thomas Lackey Jr, CMT CFP

Follow me on StockTwits and Twitter @gtlackey
(All market data above are derived from Stockcharts.com, Esignal, and Reuters Datalink)
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About Author


is a Chartered Market Technician (CMT) and Certified Financial Planner (CFPr) in Greensboro Georgia (Outside Atlanta). Founding partner of Barber Lackey Financial Group, LLC, a Registered Investment Advisor. However, this blog is not affiliated with BLFG and does not make recommendations to buy sell or hold any securities.