Last week's market summary stated "At
first glance Friday's market performance suggests further short term upside,
but after a closer look the weak volume, rotation to large cap issues, and
somewhat defensive performance of the industry groups makes a period of
consolidation seem like a more likely outcome."
And indeed the markets pulled back last week, as shown in
the table below (sorted by 5 week gain):
|
Index
|
1 Week Gain
|
2 Week Gain
|
3 Week Gain
|
5 Week Gain
|
13 Week Gain
|
26 Week Gain
|
|
Nasdaq Composite
|
-1.5%
|
-1.5%
|
0.2%
|
2.1%
|
7.5%
|
16.9%
|
|
Russell 2000
|
-2.2%
|
-3.1%
|
-1.6%
|
0.6%
|
5.0%
|
12.8%
|
|
S&P 500
|
-1.6%
|
-1.7%
|
-1.6%
|
0.3%
|
5.2%
|
9.1%
|
|
DJIA
|
-1.7%
|
-2.1%
|
-1.9%
|
0.0%
|
2.5%
|
4.5%
|
However, weekly volume was only average suggesting there was
no institutional rush for the exits.
This table sorts market performance by dividend payment, non
yielding stocks continued to outperform last week despite the pullback :
|
Price Performance
|
|||
|
Dividend
|
Week Ending 12/13
|
Month Ending 12/13
|
3 Months Ending 12/13
|
|
No
|
-1.15
|
1.20
|
7.46
|
|
Yes
|
-1.53
|
-0.56
|
5.14
|
|
Grand
Total
|
-1.35
|
0.27
|
6.21
|
The tables below show commodity, technology and
defensively related group's price performance over the trailing 1, 2, 3, 5, 13
and 26 week periods. Despite the market retreat last week, defensive group
performed poorly, suggesting investor's were positioning themselves for another
leg higher in the market.
|
30 Commodity Oriented Groups:
|
1
wk
|
2
wk
|
3
wk
|
5
wk
|
13
wk
|
26
wk
|
|
# in the top 50 groups (out of
197)
|
8
|
13
|
8
|
4
|
7
|
6
|
|
# in the bottom 50 groups (out
of 197)
|
3
|
6
|
11
|
12
|
11
|
9
|
|
28 Technology Oriented Groups:
|
1
wk
|
2
wk
|
3
wk
|
5
wk
|
13
wk
|
26
wk
|
|
# in the top 50 groups (out of
197)
|
5
|
6
|
4
|
6
|
5
|
11
|
|
# in the bottom 50 groups (out
of 197)
|
13
|
7
|
6
|
5
|
11
|
6
|
|
30 Defensively Oriented Groups:
|
1
wk
|
2
wk
|
3
wk
|
5
wk
|
13
wk
|
26
wk
|
|
# in the top 50 groups (out of
197)
|
2
|
5
|
7
|
6
|
7
|
3
|
|
# in the bottom 50 groups (out
of 197)
|
14
|
9
|
11
|
13
|
6
|
12
|
Summary: The Nasdaq continues to lead the major indexes across all
trailing time periods, not the Dow or S&P 500. There was no flight to income
as non yielding stocks lead price performance over all time periods for the
past 3 months including last week; and last week defensively oriented industry
groups performed poorly. Although the market pulled back last week these data
points suggest this is but a temporary pause before the market resumes moving
higher, most likely after the Fed meets this coming Tuesday and Wednesday.
So is the fat lady getting ready
to sing? Not yet. In fact, it looks like she's still doing her Christmas
shopping.
**********************
Industry Group Performance:
Apparel: The Apparel-Clothing Mfg group ranks #19 on the
trailing 5 week price performance list with a 5.3% gain, and the Apparel-Shoes
& Rel Mfg group ranks #22 with a 5.2% gain. The groups have jumped +52
and +71 in MarketSmith's industry group rankings over the same 5 week period to
currently rank #43 and #19 respectively.
Stocks of interest from these
groups include Vince Holding (VNCE), The Jones Group (JNY, showing heavy accumulation
while in a descending channel), Skechers (SKX), Hanesbrands (HBI, 1.4% from 50
day MA) and Under Armour (UA).
Energy: The Energy-Alternative/Other group has a MarketSmith
industry group rank of 65 but ranks #2 on the trailing 5 week price performance
list with a 10.7% gain. The Oil&Gas-Refining/Mktg is showing a
similar divergence with a MarketSmith industry group rank of 146 but ranking #9
over the trailing 5 weeks with a 6.2% gain.
Stocks of interest include NRG
Yield (NYLD), Valero Energy (VLO), Marathon Petroleum (MPC), Tesoro (TSO), PBF
Energy (PBF, strong accumulation since Oct. 10), Alon USA Energy (ALJ, resting
on the 200 day with heavy accumulation).
Retail: Select retail groups are also showing an interesting
divergence between low MarketSmith industry group ranks and strong short term
price performance. The table below lists these groups and is sorted high to low
by trailing 5 week price performance.
|
Price Performance
|
|
MarketSmith
|
||||
|
Industry Group
|
Symb.
|
5 Week Gain
|
5 Week Rank
|
|
Group Rank
|
5 week Rank Δ
|
|
Retail-Department Stores
|
G8077
|
5.6%
|
15
|
|
158
|
+31
|
|
Retail-Home Furnishings
|
G5710
|
5.5%
|
16
|
|
126
|
+28
|
|
Retail-Whlsle-Automobile
|
G5014
|
5.1%
|
24
|
|
129
|
+34
|
|
Retail-Whlsle-Auto Parts
|
G5013
|
5.0%
|
25
|
|
128
|
+29
|
|
Retail-Leisure Products
|
G5342
|
4.8%
|
29
|
|
117
|
+53
|
|
Wholesale-Food
|
G5040
|
4.3%
|
36
|
|
145
|
+11
|
|
Retail-Mail Order&Direct
|
G5321
|
3.6%
|
44
|
|
72
|
+44
|
Stocks
of interest from these groups include Valuevision Media (VVTV), Tuesday Morning
(TUES, great accumulation & huge sponsorship increases), L K Q Corp (LKQ,
1% shy of its pivot out of a second stage flat base), Penske Automotive (PAG), and
Restoration Hardware (RH, it looks like the selling climaxed this past Friday).
**********************
All data and charts displayed here are the property
of MarketSmith,
and are published here with their permission.
The Sector Trends blog does not make forecasts and
does not cheerlead with its commentary. The perspective offered is on current
trends in the market, which sectors and groups are rotating, and which stocks
from these groups are likely to perform best in a neutral/positive environment.
Readers need to provide their own assessment of market health, employ their own
risk management strategies, and trade accordingly. In a declining market nearly
all equities will suffer, including those found listed here.
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