Technician Edge: Sector Returns YTD and from Feb Bottom

Mar 30, 2010: 4:26 PM CST

Today’s Technician’s Edge column at the website focuses on the “Sector Rotation” model insights from the nine major Sector SPDRs.

Simply entitled, “Sector Rotation/Returns Performance from February Bottom and Year-to-Date,” I take a look at both timeframes and what the message is from the sector rotation model – hint:  it’s bullish as you might expect.

The full post is available via the link above, though here are the current charts on the Sector Rotation model so far.

First, starting with our “Year to Date” returns model:

A quick glance shows us that the “offensive” sectors have outperformed the “defensive” sectors by a wide margin, with Technology and Materials being unexpected laggards.

Utilities are actually showing negative absolute returns for the year – all of which is bullish.

The unexpected development comes from the unexpected underperformance by Technology, which in part is due to Google’s woes earlier this year.

Next, the returns off the February Bottom:

We see the same picture, only this time Technology clawed its way back into the game, returning the same amount as the S&P 500 off the low (10%).

All aggressive/offensive sectors outperformed the S&P (again except Technology) while all defensive/conservative sectors underperformed … again just what a bull wants to see.

The message is bullish and this is the picture of ‘healthy market’ from the Sector Rotation model – stay tuned for any changes (such as a rotation into defensive sectors from offensive sectors).

Corey Rosenbloom, CMT
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One Response to “Technician Edge: Sector Returns YTD and from Feb Bottom”

  1. Wednesday links: beta breather Abnormal Returns Says:

    […] Sector returns YTD: industrials lead, utilities lag.  (Afraid to Trade) […]