Few changes showed up in either the indexes or sectors of the U.S. Equities market. The one surprise was the 20 point drop in the Dow Jones Transportation Average, a normally static index. Three sectors dropped into the hands of the defense pointing out a few areas of weakness this week.
BPI Indexes: Six of the seven major indexes remain under the control of the offensive teams and four of the seven are over-bought. The two major broad index, NYSE and NASDAQ, are the two markets that are priced fairly. The best buying opportunities are when the indexes are showing 30% or lower bullish percent indicators. The middle of last January was such a time. This graph shows what the market did over the last three months.
BPI Sectors: Discretionary, Financial, and Industrial sectors lost ground this week and moved under control of the defensive teams. Despite these pull-backs, eight of the ten sectors remain over-bought or are showing 70% or more bullish stocks within the sector. When the stock market is priced this high, it behooves investors to be very selective in what ETFs to purchase. This is where the Kipling Tranche 2.5.1 spreadsheet is helpful.