Thursday, December 05, 2013

Market Sentiment: Inter-Sector Breadth Analysis

Finally put together my sector breadth analysis to include change over time (Looks to only work in Chrome - Timing Out in Explorer and Firefox - cross domain issue?). Google's bubble chart working very nicely and there are lots of customisation options, including tabbed histograms.  Last 10-days with Bullishness, Sector Rank, Price Change and Price to choose from.  You can also track the trails:

The weakest sector is Utilities ($XLU), but you can see how bullishness (x-axis) has improved over the last couple of days, even if it can't rise from its last ranking spot (bubble size unchanged). Value traders could look to take a punt on Utilities:


The most improved sector on the day was Technology ($XLK) with a 3 ranking spot jump (bubble size decreased). However, despite lurking on the business end of bullishness, this has steadily decreased over time, despite the improvement in rank.  Suggestion is a false dawn for Technology.  This is how it looked on the Bubble Chart:


In ranking change, Industrials ($XLI) lost two spots.  This offers a suggestion as to what may follow for Technology: after days of carrying a high rating (but not reaching my definition for a 'sell'), it dropped rapidly. It still has plenty of room to fall before reaching a buying opportunity.


I'm still playing around with this tool, but it might help shed some light on the inter-sector relationships. Use all analysis at own risk!

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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