Weekly Sector Recap
It was an ugly finish to the holiday shortened week. As pointed out in previous blog posts, the Trump Rally has been waning the last several weeks. That weakness accelerated as the week closed out ahead of the long Easter weekend. Consumer Staples and Utilities were the only two sectors to finish positive.
Healthcare was buoyed somewhat by a gain in Biotech. Consumer Discretionary (Cyclicals) was the only other relative leader (vs. the S&P 500) helped by a 1.5% gain in Home Construction. The gain in Home Construction (BATS:ITB) was likely due to the weakening in the 10-year Treasury yield. The 10-year yield was down 5.94% for the week, finishing at 2.232%.
Transportation Index Relative Strength - April Fool or April Rally Revisited
Two weeks ago it was highlighted that the Transports were struggling and perhaps telegraphing more weakness was in store for the market. Following is an updated relative-strength chart of the Transportation Index vs. the S&P 500. There was a breakdown on Wednesday that preceded the Thursday selloff. If support (green line in chart) cannot hold next week then we are in for a continued and larger correction…
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Previous Instablog's for Reference:
Disclosure: I am/we are long ITB.