Ticker Sense

The Market: No Longer Oversold

 
 
The S&P 500 is up 3.1% this week, moving market and sectors back within their trading envelopes.

In looking at the Sector Timing Model, staples is the only sector on the edge of the lower bound, just 0.3% above the bottom TE.

 
 
Click here for an explaination of the Sector Timing Model.

Reminiscences Tonight!

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Energy, Materials and Tech Outperform in July and August

With July beginning on Friday we analyzed average sector performance during the summer months of July and August since 1962. We focused specifically on when these months occurred during a bull market.

Historically cyclical sectors have outperformed the broader market with energy, materials and technology the top three performers. On average, energy is up 3.4% during July and August of a bull market, materials 3.2% and tech 2.8%. The average S&P 500 gain is 2.6%.

 

Check Out Laszlo's Column in the FT

 
"Economists Expand Remit to Find Relevant Work"

June 27th Blogger Sentiment Poll

 

 

Blogger Sentiment Poll Participants:

24/7 Wall St  BullBear Trading  Carl Futia (+) Crossing Wall Street  Dash of Insight (-) Elliot Wave Lives On (+) Fallond Stock Picks (+) In the Money  Learning Curve (+) MaoXian  Peridot Capitalist (N) Quant Investor (+) StockAdvisors.com  Smart Money Tracker (N) Traders-Talk  Wall Street Folly  Wishing Wealth (-)

Is the Economy Really in that Bad Shape?

With all the negative stories and indicators on the economy in the recent months, Wall Street has not significantly cut their outlook for this year.   

The consensus GDP forecast for 2011 at the beginning of the year was 2.6% the 2Q11 forecast was 2.7%.  Currently the consensus is 2.5% for the year and 2.3% in the second quarter.

The average S&P 500 2011 EPS estimate has risen 4.2% since the beginning of the year to $96 per share.  The year end index target has risen 1.8% to 1,399 (which is a 10% gain from the current level). 

The prevalent Wall Street view is that the economy and the market are not is as bad shape as it seems and the 2H outlook is positive.

Financials, Energy, Tech and Staples Remain Oversold

 
Click here for an explaination of the Sector Timing Model.

And Following Oil... Gasoline...

 

Bear Market in Oil?

Oil is currently trading at $91.25 and has traded as low as $89.75 today.  If oil closes below $91.14 it will have entered a 20% decline from its high on 4/29. 

This will be the second 20% decline since the beginning of the bull market.  Oil declined 22% from 4/6/10 to 5/20/10. 

Since 1983 on average, when oil enters a "bear market" it falls an additional 13.2% and the average duration is 124 days (we are already down 55 from the recent peak).

 

Watch Laszlo on CNBC!