Our review of the markets from October 4 2017
by Bill Hoover on Oct 16, 2017
1. Foreign Markets (Asia Pacific ex Japan, Emerging Markets and Europe) high flying leaders showing signs of weakening
2. Tech Dominated NASDAQ index weakening with relative strength under performing the broader S&P. Tech seems to be rolling over.
3. Relative strengths of the Russell 2000 and the Equal Weight Value Line Arithmetic vs the S&P 500 continue to increase. This is positive for the market suggesting Domestic Stocks are in favor.
4. Tactically Transportation is the new leader which is a positive for the market per the Dow Theory. It is at cycle high with strong up motion.
5. Energy long in the bearish camp has moved to Bull and may be Short Term overbought.
6. Laggards are Consumer Discretionary, Consumer Staples and Telecom.
During the review we discussed the strengthening of the dollar versus other currencies.