Last week there was a hint of market weakness and that trend extends into this week as five of the seven indexes are now in the defensive camp. The NYSE dropped out of the over-bought zone, in many ways a healthy signal. Even with the downward tilts the overall market is still quite bullish as we see from all the over-bought percentages.
Once more, we do not use BPI percentages to manage portfolios. Instead, this data, numerical and visual, provides us with a broad look at what the U.S. Equities are doing.
Index BPI: Five the the seven indexes are now positioned with the defense. Worth noting is that the two major indexes (NYSE and NASDAQ) are now positioned below the over-bought zone. With good economic numbers coming in, I don’t expect to see extended downward pressure on the U.S. stock market. But we will be watching the numbers over the next few weeks. Summer is not too far away and that season is normally a good test of broad market strength.
Sector BPI: Discretionary and Staples had a nice upward pop while Energy and Materials each took a significant hit.
The take-away, if any, is to stay the course and continue investing using a strategy that permits you to manage portfolio risk.