January 5, 2014 Executive Summary

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January 5, 2014 Executive Summary

Total Market:

  • Not much changed on the short holiday week.  Breadth did come in a bit on the broad level with the market weakness (as expected).
  • Short term indicators did come off the high some, but are just starting to form potential divergences.  Breadth Thrust Indicator only of slight concern.
  • 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.
  • AD Line showed more volatility this week, but not enough to cause any concern. Some even improved overall for the week.
  • McClellan Summation Indexes are still suggesting the moves can have room to expand higher.
  • Basic Materials was last week’s Sector Highlight and it continued to improve this week with Precious Metals making a notable move.  More to come in 2014.
  • Real Estate is discussed as a potential bottoming pattern starting here in this week’s Sector drill down.

What We are Watching:

  • The Barbell affect worked last week on a relative strength basis, but at this point, Small Caps seem better positioned into January, but overall both ends look strong.  $QQQ $DIA $IWN $IWM
  • Longer term still think $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 they show any signs of weakness.  Financials look great here.  $XLF $IAI $IAK $XLK $IYK $IYJ
  • Basic Materials are still in the early stages, so look close at its ETF RS Rankings.
  • Real Estate to see if it can continue to solidify the bottom it is trying to put in.  ETF RS Rankings as well as Individual RS Ranking lists are a good place to start.  $IYR $MORT $ROOF $VNQ

Thanks for taking the time to review this report.  If there are improvements I can make, I would love to hear them.  Please email me at gtlackey@gmail.com and please include your Stocktwits or Twitter handle.

Good luck this week.  It 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.