Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
It is hard to get behind any sort of pronounced rally when these are the sector ETFs showing the best relative strength
- SPDR Utilites (XLU)
- iShares Investment Grade Bond (LQD)
- iShares Preferred Stocks (PFF)
- Market Vectors Oil Services (OIH)
- SPDR Consumer Staples (XLP)
Other than #4, that is one defensive group of leadership sectors.
Of course there have been bounces in more “beta” sectors as we have had the “everything must go up” days (student body left) but many of those groups have bounced off big selloffs. There is some percolating action in broader energy, and a few snippets of technology but by and large hard to find much else as sustained leaders.
This leadership group we currently have is much more akin to what was keeping markets elevated in December 2011. Recall on the first day of 2012 there was a massive sector rotation out of the above groups, and into the pro cyclicals as if on a dime. That led to a pronounced multi month rally. Therefore for those seeking the same, it would seem likely a similar type of rotation needs to occur.
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