Weekly Assessment of Market Sentiment and Sector Trends
Before we dive into the week analysis, a few points: The weekly time frame captures the sentiment from two quarters to a year. It should not be mixed with the short term daily sentiment that runs from two weeks to a less that quarter. This intermediate cycle has run since end of October 2023 and I expect that we are forming top here. It is well corresponds with the daily sentiment where the drop slowly continues and I expect to accelerate. So far I do not expect major drop and correction, rather than a rotation into more inflation sensitive sectors. As you going to see in the weekly report, we have a long term BUY signal in the XLB Materials ETF.
Broad Market Overview:
The broad market sentiment, as indicated by the percentage, saw a slight increase to 66.53.6% compared to the previous week’s 65.72%. Volatility experienced a decrease of 3.44%, maintaining its position in NO_POSITION mode. This suggests a relatively stable sentiment with a slight uptick in confidence among investors.
Gainers:
Among the sectors, Consumer Discretionary showed the most notable gain, rising from 65.1 to 66.58, indicating a velocity of 2.48 with an acceleration of 0.50. This suggests a positive momentum within the consumer discretionary sector. Health Care also exhibited significant growth, moving from 50.89 to 54.76, with a velocity of 2.09, although its acceleration experienced a slight decline of -0.89. Notable new participants: ULTA, BBY.
Laggards:
On the other hand, Communication Services saw a decline in sentiment to 52.78, indicating a negative velocity of -0.93 and an acceleration of -0.93. Real Estate also experienced a decrease in sentiment, albeit minor, moving from 64.55 to 65, with a velocity of -0.45 and an acceleration of -0.45. These sectors may warrant closer observation as they exhibit signs of weakening sentiment. Notable new participants: SWX, KR, PG. Notable dropouts: PARA
Summary:
In summary, the broad market sentiment remained relatively steady, with a slight uptick compared to the previous week. While some sectors such as Consumer Discretionary and Health Care demonstrated positive momentum, others like Communication Services and Real Estate experienced slight declines. Overall, the mixed performance across sectors suggests a nuanced market sentiment, with certain sectors outperforming while others lag behind. Investors may continue to monitor these trends closely for potential investment opportunities or risk management strategies.
