The year ended slightly stronger as the Dow Jones Transportation Average (DJTA) managed to move out of the over-sold region pushing it into the offensive camp. Several sectors of the market also moved from defense to offense, but there were reverses in the other direction.
Index BPI: Only two of the major markets are currently show strength and they are the DJTA and S&P 500. Both of these indexes are dominated by large-cap stocks. We need to see the NYSE show more strength as that index includes more mid- and small-cap companies.
Several of these indexes overlap significantly in the stocks they hold and I am considering modifying the BPI tables in an effort to capture completely different sections of the market. The sectors table does a better job of that, as it slices the market in a way not shown by the major indexes.
Sector BPI: Discretionary, Financial, Industrials, and Utilities made the move from defense to offense this week while Staples, an over-bought sector, moved back to defense as did Technology. Energy is the only over-sold sector as the stocks within that sector continue to be beaten down.
While the gains this past week were quite modest, perhaps we will add to the few positives next week and throughout January.