Monday, April 28, 2008

Monday Sector Strength

Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged.  | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |



Mixed news today.  The SPX wasn't able to close above the important 1400 level, but underlying breadth of the market was decent with the NYSE new highs breaking above the 50-level and new lows way down in bull market territory.  And the SPX bullish percent continued to tick slowly higher in positive fashion.  Unfortunately, the NASDAQ new highs /new lows were still inverted on the NASDAQ, although the new lows weren't that bad at 59.




Good news showing up in the spreadsheet above.  Only gold shares shifted lower which is probably a positive for the market.  Computers, Cyclicals, Software, Industrial Equipment, Automobiles are economically sensitive groups that have broken out above their moving averages.  This is a very favorable development and confirms what was noted yesterday that both ECRI and Trim Tabs are detecting the early, tentative signs of a pickup in economic activity.  Savvy investors are moving back into the market in advance of this news hitting the newspapers.


 

IBD is 2-for-4 in their market calls over the last nine months.  They are the first to acknowledge that their method only works 70-80% of the time, and most of the failures happen during bear markets or major corrections.  The last one was a very good call.  They seem to have a very good feel for the market that goes beyond just the rules that they publish.  Investing when they give the all clear gives me added confidence that I'm reading the market correctly.




Talk about a confidence boost.  Having both the industrials and transports breaking out and leading the market is classic technical action.  Now we really need the SPX to close above the 1400 level.

Posted by HeadlineCharts at 20:14:15 | Permanent Link | Comments (3) |
Comments
1 - The DJIA and DJTA made simultaneous all-time highs in spring '07 and were again "breaking out" in July '07. This so-called signal apparently can cost you a lot of money to use. (Comment this)

Written by: Anonymous at 2008/04/29 - 08:25:38
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2 - Good point. I will try and respond in today's post. (Comment this)

Written by: HeadlineCharts at 2008/04/29 - 16:38:45
3 - IBD is 2 for 4? There are 7 calls highlighted on the chart. I see them 4 for 7.
Aren't all their calls rule-based? I dont believe they add any "feel" to their market calls. (Comment this)

Written by: Anonymous at 2008/04/30 - 06:21:06
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