S&P 500 sector watch: no news is not good news!
Increasingly, I see a market lacking leadership. And let's face it, the king has fallen for now.
We are hard at work adding new features every day to ROAR.PiTrade.com, the ROAR Score analytics and portfolio creation system that is the product of my decades of staring at charts. I still do a lot of that, but I think many investors, DIY and professional alike, would agree that having a quick, easy, smooth way to analyze lots of ETF and stock information at once is a good thing. That’s what we’ve created.
It will be free to use for a little while, so we encourage you to try it out. During this short “beta testing” period, while the site is not “paywalled,” I will be sharing some of my go-to pages. These will continue to be featured in our Weekly ROAR newsletter for ETFYourself.com subscribers, even after the paywall on the analytics site goes up.
Bottom line: ROAR.PiTrade.com is for you if you are the type that wants to analyze ETFs and stocks, and create portfolios on your own, with a rare feature: it emphasizes NOT LOSING BIG. That’s the goal of the ROAR Score I created.
But if you like the idea of being aware and proactive in markets that are not quite as friendly as the ones we’ve had, then you’ll still get some weekly and daily highlights (like this one below) by subscribing to ETFYourself.com. Its $15 a month or $150 for a 12-month subscription.
S&P 500 sectors: ROAR Score analysis
Here’s what I see above:
Not much change from the past couple of weeks, but that’s not a good sign to me.
Strong markets do not hang around as long as this one has. True to my ROAR approach, I can never count this stock market out. But the signal here is that 4 sectors (in red) are “longshots” to rally by 10-15% or more from here, before they drop by a similar amount. And XLV and XLE (40 and 50 ROAR Scores) are not much more encouraging.
4 more sector index ETFs are at the 60 level, but except for XLB (Materials) they are pretty stuck right now. And XLB has to be taken with a grain of salt (pun intended, its basic materials), given how whippy the metals markets have been. So 60 to me might as well be 40 (higher uncertainty, but still in that neutral/yellow zone).
That leaves REITs, currently at 70, but perhaps having run its course. It made a marginal new high, yes. However, as my late father taught me (by having me read the classic technical analysis books circa 1980s), a breakout is best considered to be more than just besting a prior high by a few pennies. 2-3% up from the old high level is more like it.
The takeaway
This is not a strong market at all. Does that mean it can’t recover and rally hard for a while? Of course not, anything is possible. The average ROAR Score of those 11 S&P 500 sector ETFs is about 44. That’s somewhere between “on the edge” and "sanguine” to me. The best thing I can say is that it isn’t getting decidedly worse.
In tomorrow’s Weekly ROAR, our subscribers-only post, I will dive into some of these sectors, where I think we will find that winners and losers are easier to identify. But more significantly, this is no market for complacency.