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DEFENSIVE SECTORS STILL OUTPERFORMING OFFENSIVE SECTORS

Arthur Hill

Arthur Hill

Chief Technical Strategist, TrendInvestorPro.com

The first chart shows the S&P Sector PerfChart for the one month time frame (22 trading days) and the second chart shows the three month timeframe (64 trading days). Note that these PerfCharts show relative performance, which is the amount the SPDR is outperforming or underperforming the S&P 500. SPDRs in positive territory are leading and outperforming, while SPDRs in negative territory are lagging and underperforming. Both PerfCharts show the same picture: the offensive sectors are underperforming and the defensive sectors are outperforming. The offensive sectors include consumer discretionary, finance, industrials and technology. The defensive sectors are consumer staples, healthcare and utilities. Also note that energy is a leading sector. Relative strength in the defensive sectors indicates risk aversion and a preference for safety. Such risk aversion is negative for the broader market and could foreshadow an summer peak in the S&P 500.

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Good day and good trading,
--Arthur Hill CMT

 

Arthur Hill
About the author: , 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. Learn More