All major equity indexes are positioned with the bears as the market trend is down. We see this as all indexes show O’s in the right-hand column when the PnF graphs are examined. The only positive signs lie with Telecom and Utilities, two income and defense oriented sectors of the U.S. market. Later this morning I plan to do a review or screen of sectors using the Kipling LRPC spreadsheet. This is to identify the two market sectors to include with portfolios coming up for review in April.
Index BPI: Several indexes are moving closer to the over-sold zone. This is when the percentage of bullish stocks drop to 30% or below. For example, the S&P 100 is only one stock away from hitting this mark as 31% of stocks in this index are bullish. Should several major indexes drop into the over-sold zone over the next few weeks we may see some buying opportunities in late summer.
Sector BPI: Note where the money went this week as Telecom and Utilities are bullish. Investors are fleeing to low volatile and interest bearing companies. Discretionary and Financial sectors are perilously close to the over-sold zone.
Be patient and cautious with new purchases. We are looking for an upward trend to set in.