Some Sector Strength Returns

This spreadsheet is showing a lot of green. The relative strength of US Stock ETFs has improved. I am a little surprised, though, to see the TLT remain as a such a standout leader without anyone nipping at its heals.

Despite some strength in stocks, the market continues to show a bearish alignment with the TLT so far ahead of the pack, and with the Small Caps and Transports as laggards. If and when the market resumes a longer-term uptrend, these positions will be reversed.

The sectors continue to show the defensive groups in the lead, and the cyclicals in the weak zone. It isn't a bullish set up for the general market.

Last time we looked at this spreadsheet, the Gold Miners were way in the lead, but they have quickly faded. The best set-up to buy the miners is when they are performing well along with the other commodity-related stocks, and that is clearly not the case at the moment.

Among the Industries, dividend-payers are the leaders. Again, this is defensive, and it reflects a poor set-up for the general market along with a weak trend for bond yields in general. It is encouraging, though, to see Retail and Biotech doing well. I always underestimate these two groups.

Within the dollar-denominated foreign ETFs, the commodity producing countries are leading, probably due to the strong turnaround in oil prices. In general, the developed-country foreign ETFs do not look like the place to put money at the moment.

This spreadsheet is doing a good of revealing the current markets trends. The bottom line is that there is short-term stock market strength within longer-term weakness. 

At the moment, I am about 30% invested in stocks with the rest in cash, and after looking at this spreadsheet, that seems about right.

Outlook Summary:

The long-term outlook is negative, but there is a whiff of strength.

The medium-term trend is up as of Jan-4. 

The short-term trend is up as of Dec-26. 

The medium-term trend for bond prices is up as of Nov-16 (prices higher, yields lower).

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Disclaimer: I am not a registered investment advisor. My comments above reflect my view of the market, and what I am doing with my accounts. The analysis is not a recommendation to buy, ...

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