Sector Risk Gauge 2023-08-16 (with preceding 8 weeks context)

Did you know? The U.S. stock market has transitioned from strengthening to weakening over the past 8 weeks as graphically shown by the emotion- and confusion-killing Sector Risk Gauge (SRG). Link to download the report: Sector Risk Gauge 2023 08 16 Sector Risk Gauge 2023-08-16.pdf 2 MB download-circle

Metals 2023-08-15: -1 to "WEAK" strength rating (6th strongest of 9 levels), previous move was DOWN

Here's my previous look at Metals from August 8, 2023. This week? Weakening throughout the industry. Gold has weakened for 3 straight weeks and shares with Silver the weakest sub-industry rating at Weaker (7th strongest of 9 levels). One could argue this is setting up for some attractive

Energy 2023-08-15: Unchanged at "STRONG" strength rating (4th strongest of 9 levels), previous move was DOWN

Previous review of Energy is available here. In that review I stated the following: The bottom line is that Energy has been generally strengthening over the past 8 weeks until this last one. As always I make no predictions. I will point out the obvious that a multi-week decline begins

Materials/Construction incl. Homebuilders 2023-08-15: Unchanged at "STRONGER" strength rating (3rd strongest of 9 levels), previous move was UP

Previous review of homebuilders is here. The industry has been flat at Stronger for the past 8 weeks. There was some underlying weakening, with 4 of the 8 sub-industries weakening by one level each. There was no industry-level strength change, however, because the underlying sub-industry weakening was not enough to

Market Conditions Matter

Did you know? 99 of 100 stocks fell during the COVID 19-caused 2020 implosion. How helpful were those style boxes during this period? 19 of 20 stocks rose as the S&P500 then more than doubled to its 1/3/22 peak. Did charting and technical analysis wizardry truly

Financial Services 2023-08-14: -1 to "Strong" strength rating (4th strongest of 9 levels), previous move was up

Previous Financial Services review from 2 weeks ago is here. Recession or no? Hard or soft landing? Some are arguing "this time is different" (when looking at inverted yield curves and other data which historically have signaled oncoming recession). This industry should reflect the bite of higher interest

Not a good “against market timing” argument (spoiler alert: the best/worst market days cluster)

Did you know? “Conventional wisdom” isn’t necessarily wisdom. “If an investor were to simply miss the 10 best days in the market, they would have shed over 50% of their end portfolio value.” The above quote is from a Visual Capitalist article yesterday (search for "Timing the Market:

Metals 2023-08-08: -1 to "Average" strength rating (5th strongest of 9 levels), previous move was up

Here's my previous look at Metals from July 25, 2023. Gold has fallen over the past two weeks from Strong to Weak, the 6th strongest of 9 levels. It is now back to its strength level from 8 weeks ago. NEM/Newmont Gold, the most well-known of these

Energy 2023-08-08: -1 to "Strong" strength rating (4th strongest of 9 levels), previous move was up

Previous review of Energy is available here. The bottom line is that Energy has been generally strengthening over the past 8 weeks until this last one. As always I make no predictions. I will point out the obvious that a multi-week decline begins with one down week. I personally would

Materials/Construction incl. Homebuilders 2023-08-08: Unchanged at "Stronger" strength rating (3rd strongest of 9 levels), previous move was up

Previous review of homebuilders is here. The industry has been unchanged at Stronger for the past 8 weeks. General Contractors has also been rated Strongest for 8 straight weeks. The Residential Construction, or Homebuilders, sub-industry has been rated Strongest (the highest strength level) for 7 straight weeks, after rising to

Real Estate 2023-08-04: -1 to "Average" strength rating (4th strongest of 9 levels), previous move was up

Here's my previous look at Real Estate. I've had fun recently comparing everybody's AI darling NVDA/Nvidia with recent (but no longer) punching bag VNO/Vornado Realty Trust. VNO has, since its recent bottom on May 16, 2023, outperformed all other Real Estate industry

Banking 2023-08-04: Unchanged at "Average" strength rating (5th strongest of 9 levels), previous move was up

Here's my previous look at Banking. Not a lot of activity here, though as noted in Leaders and Laggards below it was an active week for stocks that fell all the way to Weakest. Leaders and Laggards Current strongest and weakest stocks are shown below. These are of

Computer Hardware 2023-07-31: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was down

Here's my previous look at Computer Hardware. I'm including this more for curiosity and as a way to keep a finger on the pulse of tech. The largest sub-industry Networking & Communications Development weakened this past week and has been flip-flopping over the past 8 weeks.

Telecommunications 2023-07-31: Unchanged at "Weak" strength rating (6th strongest of 9 levels), previous move was down

Here's my previous look at Telecommunications. In that note, I highlighted the tough recent and longer-term sledding for VZ/Verizon and T/AT&T. Since that report both stocks have recovered 9% from their July 17, 2023 lows. It is certainly possible they'll continue to

Internet 2023-07-31: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Here's my previous look at the Internet industry. No changes during the past two weeks. As seen in Leaders and Laggards below, CDLX/Cardlytics enjoyed a 38% gain over the past week while SNAP/Snap Inc. fell by 10%. Cardlytics, a member of the Internet Information Providers sub-industry,

Financial Services 2023-07-31: Unchanged at "Stronger" strength rating (3rd strongest of 9 levels), previous move was up

Should it be expected that these stocks would be stronger in a rising rate environment? Financial Services is comprised of of Asset Management, Credit Services, Diversified Investments, and National and Regional Brokerages. This is the home of MS/Morgan Stanley, GS/Goldman Sachs, AXP/American Express, SCHW/Schwab Group, BLK/

Retail 2023-07-28: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Here's my previous look at Retail. In that previous look I focused on Grocery Stores, which is the largest sub-industry in this industry with 10 stocks. Below in "a closer look" I focus on the next-largest sub-industry Discount/Variety Stores which includes COST/Costco, WMT/Walmart,

Specialty Retail 2023-07-28: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Here's my previous update for Specialty Retail. In my previous update I looked closely at CVNA/Carvana, which at that point had risen 884% between December 7, 2022 and July 14, 2024. Incredibly enough, over the next 3 trading days the stock rose another 48%, with a 40%

Software 2023-07-27: Unchanged at "Stronger" strength rating (3rd strongest of 9 levels), previous move was up

Here is my last look at Software. Software has been strengthening over the past 8 weeks, though it has been flat for the past two. Last time I focused on RIOT/Riot Platforms which had "...popped 50% in one week AFTER a nearly 300% YTD gain." This RIOT

Electronics 2023-07-27: Unchanged at "Stronger" strength rating (3rd strongest of 9 levels), previous move was up

The Electronics industry with 121 stocks has remained Stronger over the past two weeks and was choppy for the preceding five. Broad Line Semiconductors (13 stocks) is the strongest sub-industry. This is the home of long-time stalwarts INTC/Intel and TXN/Texas Instruments along with AVGO/Broadcom, all of which

Metals 2023-07-25: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Though there has been some choppiness over the past 8 weeks in a couple of the sub-industries, Metals/Mining overall has been moving up over the past 4 weeks. Copper is leading at Very Strong, but note it only has 2 stocks, while 4-stock Aluminum is right behind at Stronger.

Energy 2023-07-25: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Strengthening is evident in the Energy industry, with "a closer look below" showing how much of the Major Integrated Oil & Gas group (home of the heavy hitters) strengthened. Major Integrated O&G - a closer look at the heavy hitters Major Integrated O&G made

Materials/Construction incl. Homebuilders 2023-07-25: Unchanged at "Stronger" strength rating (3rd strongest of 9 levels), previous move was up

Here's my most recent previous review of homebuilders. In this subsequent two week period it has been more of the same. Materials/Construction has been strong for a while. The three sub-industries ranked Strongest (Cement, General Contractors, and Residential Construction/Homebuilders) have been so for at least six

Real Estate 2023-07-21: Unchanged at "Strong" strength rating (4th strongest of 9 levels), previous move was up

Real Estate continues its improvement, starting at Weaker (7th strongest of nine levels) eight weeks ago and this week staying at Strong (4th strongest). Will this continue? Hotel REITs are weakest of the bunch at Weak (6th strongest) - while post-COVID performance is bouncing back, there appear to be legs

Banking 2023-07-21: +1 to "Average" strength rating (5th strongest of 9 levels), previous move was up

Strengthening throughout Banking for the just-completed trading week. Foreign Regional and Money Center banks leading the charge with Stronger ratings, 3rd strongest of nine levels. There are six geographic regions into which the country's banks are segregated for this analysis. Is it amazing or expected that all six