Market Monitor

Market Monitor: Bearish

• Market continues to be in bearish territory based on all Market Monitor indicators.
  
• Wednesday and Thursday was the only small bounce in this down move so far.
• Friday witnessed yet another 300 plus down day. The volume however was low.
• For medium term and longer term traders this market is not worth risking capital till there is a clear buy signal on Market Monitor.
• Most of the readings on MM have not yet reached extreme, which indicates likelihood of more downside and failure of any bounce at this level.
  

Sector Trends:
Let us take a closer look at some of the sector trends clearly visible currently on both long and short side.
Sectors where breakouts are still concentrated in our sector tracking methods are:
Energy
Fertilizers
The Solar Energy stocks have given up their number one ranking and Fertilizer stocks are now number one sector. The speculative stocks in Solar Sector have had reversals while those with stellar fundamentals continue to hold well.
Medical Groups dominate the top 20 group list now. Medical group breakouts are the only breakouts which have had some follow through in last 10 -15 days. Medical group is a typical defensive group and it tends to do well in bear markets.
Energy stocks have had sporadic breakouts, but follow through is lacking and most seems to be heading in to bases.
The fertilizers stocks have recent good earnings, but most of them have stalled at this level. However in case of a bounce they may be first to bounce back.
52-Week Lows
Bases on stocks making 52 week high the top 6 Friday sectors were:

1. Medical
2. Energy
3. Mining
4. Finance
5. Consumer
6. Retail

Looking at this data over 1-2 weeks gives you better picture of sector trends. As I have previously explained in my post "How to trade Sectors" this kind of tracking is more actionable way to track sectors than typical ranking list. I will be adding a sector tracking spreadsheet to Market Monitor page.
Concentrating your buys in top 2-3 sector from this ensures that you get in to sector before it starts moving in the sector ranking table.

Groups With The Greatest % Of Stocks Making New Highs

1. Oil and gas US royalty
   
2. Tobacco
3. Metal ores gold and silver
   

This tracking gives you another read on sector trends which you do not get by tracking the sector list. Again you have to look at 10 to 15 days data on it to identify new sectors taking on leadership in the market.

52-Week Lows

1. Retail
2. Semi
3. Banks
4. Business Services
5. Medical
6. Computer Software

This list is useful to prioritize short entries. Stocks from these sectors have higher probability of making good shorts. You will notice umber of shorts appearing in EP are from these sectors currently.
Some sectors with large number of stocks like Medical and Retail can often show in both list. However the trend in retail stocks is predominantly down in recent months.