Expectational Analysis on Sectors

Below is summary table of various factors in our EA approach on various sectors.

Here's how to read the table:


Any measure in green is considered bullish with the sector exceeding the S&P 500 Index benchmark (last line in table). For example, if the index outperformed the SPX on any 1-month to 1-year % return measure, it was considered bullish.


Any measure in red is considered bearish with the sector falling short of the S&P 500 Index benchmark (again last line in table).


The Fidelity Share Percentile is green when the Percentile is less than 60% and red if the percentile is higher than 90%

Noteworthy Observations:
(1) Retail has been strong technically (outperforming SPX 3-month to 1-year), has a fairly low buy percentage (37.84%), low Fidelity share percentile rank (43.20%), pessimism on the SOIR front and a Fundamental/Earnings Momentum factor that is better than the SPX average (2.7 vs.2.88)


(2) Healthcare has been underperforming the SPX over various percentage return measures. In spite of this weakness, over half the ratings are buys for the sector. Furthermore, Fidelity Percentile stands at 97%. Fundamentally, Zacks averages out to be 3.17.


(3) Utilities looks good with the exception of Fidelity share rank (92%)


(4) Automotive looks good with the exception of Zacks average (3.09)

S&P 500 Commitment of Traders

Large Speculator on the S&P 500 Index have shifted lower in their net positions (top graph).

The second graph shows that the liquidation of Net Positions have been a harbinger of a market downturn.

Finally, small trader has spiked in net positions.

SIR Equity P/C Ratio

The SIR Equity p/c ratio has come off its highs from the 0.73 range. As seen by the graphic below, these peaks marked perfect bottoms over the last three years.

The growing concern now is that the p/c ratio has stopped declining and may have put in a bottom on December 5 (second graph).

The final graph is a forward weighted moving average, which confirms the second graph that a bottom could be forming.

Our interpretation has been a declining SIR p/c ratio is bullish while a rising one is bearish. At this moment, it appears that we may be transitioning from a declining ratio to a rising ratio.

Given that the market (SPX) has stalled since late November, option players seem to be adjusting positions.

Fortune 10 Stocks to Buy

10 stocks to buy now

With oil prices and a housing bust threatening the economy, we discovered ten solid stocks that can still pack a punch.

Investors Intelligence Factoid

Last Wednesday, Investors Intelligence registered a reading of 59.8% - the highest since 12/28/2005's 60.4%

As seen by the graphic below, market letter editors are becoming more bullish and nearing the top end of the sentiment range.

I looked at the significance of the signals for two different market environments - 2000-2003 (bear market, 3 signals) and 2003 to present (bullish bias market, 11 signals).

I also included any signals since 1990 - totals only 26.

SPX Winning Streak Factoid

I looked into the current streak of the market with no market (SPX) pullback (on a closing basis) of 10% or more

We are on calendar day 1,369. Our last 10% decline was last seen in March 2003.

Since 1970, this is the third longest streak without a 10% decline.

The longest streak was 2,546 calendar days from 11/7/1990 to 10/27/1997
The next longest streak was 1,890 calendar days from 8/12/1982 to 10/15/1987

Other streak include: 1,119 calendar days 10/3/1975 to 10/26/1978