Market Summary

With the end of the 1st quarter behind us I thought it would be a good idea to look at how the different sectors of the economy are doing. In trading and investing, if you pick the right sector to invest in even if you make a bad individual stock pick chances are you will be a winner and can say along with Charlie Sheen "winning". The old saying "a rising tide lifts all boats" can be applied to sector analysis. The S+P 500 is divided into nine sectors that can be followed with the following ticker symbols: XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, and XLY. With this in mind I want to identify and take a look at the strongest and weakest sectors and the winner of the strongest sector award goes to XLE, the energy sector. As can be seen from the chart below it has been rising on a steady uptrend with prices well above their 50 day moving average which has acted as support. Click on chart to enlarge.

The winner of the weakest sector award goes to XLF, the financial sector. As can be seen from its chart below it has had choppy moves going back and forth as it has been rising and is currently right on its 50 day moving average at 16.53. As no continued rally in the economy can take place without support from the financial sector the question arises: Is the XLF the "Canary in the coal mine?" or is it simply lagging the broader economy? This is a difficult question to answer and time will tell so we will just have to wait and see. Click on chart to enlarge.

The table below list the performance of each of the nine sectors sorted by Year-To-Date(YTD). As can be seen at the end of the 1st quarter XLE is up nearly 16% while the XLF is up less than 1%. This is the kind of difference that makes all the difference in your trading and investing. For comparison, the S+P 500 is up 6.45% YTD. I hope this helps. Click on table to enlarge.