Here's a look (below) at how sectors are trending now based on the Chaikin Analytics Bull:Bear Ratio. We use this analysis to anticipate relative strength and sector rotation in the coming 3-6 month period. We'll look for bullish trades in sectors with ratios higher than the market (SPY) on the assumption that we'll benefit from future outperformance..
Lately, defensive sectors Utilities (XLU) and Healthcare (XLV) have been showing persistent fundamental and technical strength. That's not a great sign for future stock market performance, especially when high beta sectors like Materials (XLB) and Industrials (XLI) have fallen below the SPY. Financials may be getting a boost in anticipation of lower bond prices and higher interest rates (though we've "seen this movie before"). Energy (XLE) is getting a boost from geo-political instability and higher oil prices. These are the parts of the market that will likely offer the most attractive returns in the next 60 - 90 day, and it's where we'll look for bullish trades.
Watch our video for more inter-market analysis using Chaikin Analytics. (best on Chrome)