Stocks Above 5-Day The S&P 5 experienced its first 1%+ move in either direction today for the first time in 58 trading days. The 1.4% drop left the index below its 5-day moving average as well. Market internals have weakened significantly on the dip, as more stocks in the index are now oversold than overbought, and just 4% of stocks in the index are above their 5-day moving averages. In last week s Sector Snapshot we noted that it had been 17 trading days since less than 4% of stocks were above their 5-days, and we also noted that the streak was bound to end at some point. We didn t expect it to come so close this quickly, but that s the market for you. As shown in our trading range screen for the major sectors at right, the pain has been felt most in,,, and have the last week, as all four sectors are now oversold. The only area of the market that is overbought is the tried and true defensive Utilities sector. It s been so long since the market experienced a pullback that it probably feels more painful than it usually does. That being said, the market s long-term uptrend remains in place. Note that we did raise our stop prices on a number of positions in our Model Portfolio yesterday, and we will honor them so that cash is raised should this pullback turn into something more sinister. 55 45 5 5 5 5 S&P 5 5 1% 5 5-5 - -5-14.7-1. 1-Day A/D Line (% Issues) S&P 5 Sectors: 7 YTD % Change 5 5-5 S&P 5 1-Day A/D Line -5-1.9 % Stocks Above 5-DMAs S&P 5 Trailing 1-Mth P/E. 4..5.5 7.5 7.5 8.9 9.8 1.9 Sector s vs Trading Range Index/Sector Current 1 Wk Ago OS N OB ETF S&P 5 N OB SPY Cons Discret. OS N XLY Cons Staples N N XLP OS N XLE N OB XLF N N XLV OS N XLI OS N XLB N OB XLK Svcs N OB IYZ Utilities OB OB XLU Circle represents current level. Tail represents where index was one week ago. 1..4 75%.5 5%..5.7 5% 4%..5 5-day MA %. Page 1 of 7
77 1 7 59 57 7 55 5 51 57 49 59 45 57 55 4 5 51 5 49 47 45 5 1 4 5 95 9 85 8 75 7 4 8 5 5 175 15 5 145 59 55 54 5 49 45 4 44 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 May-17 Jul-17 1 95 9 85 8 75 7 5 9 8 7 5 4 Utilities Page of 7
1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line 1-Day A/D Line - 1-Day A/D Line - -7. -14. - - -.4 -.7 - - -.8-1. - - -17. -17.7 Utilities 4 4 - - -4-4 -. 4. Page of 7
Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day Stocks Above 5-Day 1% 1% 8% % 4% 8% % 41% 4% 4% % % % % 1% 1% 8% 5% 8% % 4% % % 4% % 1% % % 1% 1% 8% 8% % % 4% 4% % % % % % 1% 8% % 4% % 1% % % 1% 9% 8% 7% % 5% 4% 4% % % 1% 1% Utilities 8% 8% 8% % 4% % 5% % 4% % % % Page 4 of 7
.57 4.77 1 11 9 7 4.59 5 17.5 1 14 1 1.48.5 17 1 4.1 5 4..5 Utilities.7 17 1 14.1 1.5 17.5 1.5.5 Page 5 of 7
Rising lines indicate that sector is outperforming S&P 5, while downward sloping lines represent sector underperformance. Red dots indicate Fed rate hikes, and blue dots represent Fed meetings where no changes were made to interest rate policy. 1 - -1-9 - -1 9 - -9-1 - - 1 9-8 - 4-9 -1-4 1-1 - - 1 9 - Services Utilities -5-1 - - -4 - -5-8 - -1 Page of 7
5 1-Day A/D Line Stocks Above 5-Day 1 145 1 Trading Areas S&P 5 1 st. dev. above 5-day st. dev. above 5-day 5-day MA st. dev. below 5-day 1 1 st. dev. below 5-day Jul Oct Dec Feb-7 Apr-7 Jun-7 Aug-7 1-Day A/D Line S&P 5 5-5 -5-4.4 Aug Oct Dec Feb-7 Apr-7 Jun-7 Aug-7 1% Stocks Above 5-DMA (%) 75% 5% 5% 5% % Jul-11 Sep-11 Nov-11 Jan-1 Mar-1 1.. P/E S&P Ratios 5 5-day MA 14.1 14. 1. 1. 11. May-11 Jul-11 Sep-11 Nov-11 Jan-1 Mar-1 - -4-8 -1-1 -14-1 - Sector Relative Strength Jun-7 Sep-7 Dec-7 Mar-8 Jun-8 Page 7 of 7