S&P 500 and Sector Breadth

Even after a 3%+ up day for the S&P 500, just 14% of stocks in the index are trading above their 50-day moving averages.  Just to get down to the prior lows in this reading over the past year, we'll need to see another gain of 2-3%.  After getting so oversold, there is still quite a bit of room to run even before markets get back into the middle of their trading ranges.  Energy, Industrials, and Materials are the only remaining sectors with less than 10% of stocks trading above their 50-days.  Technology, Consumer Discretionary, and Telecom have the highest breadth readings at the moment.

Comments

[theyenguy]

The Yahoo Finance Chart of IYH, shows that health care stocks began to turn down April 16, 2010, roughly at the time when base metals, DBB, turned down as investors became concerned over credit tightening in China, and yen carry traders exited Brazil, EWZ, and investors forsook Europe, FEZ, on concerns over sovereign debt.

The Bespoke’s Sector Trading Range Charts Report for April 20, 2010 shows health care starting to fall while others were holding up.

IYH traded last at 59.64; the SeekingAlpha chart of IYH shows a broadening top pattern that goes back to mid-October 2009.

The Bespoke S&P 500 and Sector Breadth Report shown above indicates that the health care sector and the utility sector are leading the way down in a bear market, disinflationary economic collapse, which can also easily be seen in the Yahoo Finance chart of IYH, compared to SPY, DIA, QQQQ, IWM and RZV.