Leadership from three of the four key offensive sectors makes the September surge all the more impressive. I consider the consumer discretionary, finance, technology and industrials sectors as the offensive sectors that are key to the stock market and the economy. Leadership from at least 2 of the 4 is needed for a rally to have legs. Consumer discretionary represents the most economically sensitive sector (think retail). Finance represents the health of the banking system. Industrials represent the industrial base. Technology represents the appetite for risk with its high-beta stocks.
The S&P Sector PerfChart shows the consumer discretionary, technology and industrials sectors up over 8%** this month. All three are up more than the S&P 500, which means they show relative strength and upside leadership. These are the sectors the bulls want to see leading the market higher. The fourth wheel, finance, is up less than 8%, but still outperforming the broader market with a respectable 7.79% gain. The only negative here is the short-term overbought conditions after such a sharp advance in a short period of time.
The S&P Sector PerfChart shows the consumer discretionary, technology and industrials sectors up over 8%** this month. All three are up more than the S&P 500, which means they show relative strength and upside leadership. These are the sectors the bulls want to see leading the market higher. The fourth wheel, finance, is up less than 8%, but still outperforming the broader market with a respectable 7.79% gain. The only negative here is the short-term overbought conditions after such a sharp advance in a short period of time.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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