Prior to yesterday's open, we scored ETF relative strength to get an idea of where institutional money is flowing. This was prior to the huge move XLB made for the second day in a row yesterday. (Gold not tracked here is also exploding higher). Unlike typical relative strength analysis, which focuses on where performance has been strong in the recent past, we use Chaikin Analytics technicals and Powerbar differentials to score ETF's, along with returns in the past one, three and six month time frames. We think this gives us some visibility into where the puck is headed and not just where it has been (look at XLB's move from the 1oth to 3rd despite not incorporating yesterday's huge candle in the analysis). We also see strength in both Financials and Utilities, but notice how the these ETFs rank shifts, ebbs and flows as the bond market moves up and down and interest rates oscillates. The Fed is talking easy money ahead and Fed fund futures has been signaling that for some time now, so real estate, utilities and staples have moved to occupy the upper half of our rank.
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