What the Sectors Are Telling Us

Brett Steenbarger submits: In the last sector update , we found that most of the sectors were not in a trending mode, as measured by the Technical Strength measure. With Monday’s large drop, Tuesday’s snapback, and Wednesday’s mixed session, the sectors have moved off their neutral levels:   MATERIALS: -200 INDUSTRIAL: -280 CONSUMER DISCRETIONARY: -140 CONSUMER STAPLES: +80 ENERGY: -320 HEALTH CARE: -260 FINANCIAL: +280 TECHNOLOGY: -280 The financial sector has gotten most of the recent press, and that sector has responded to rescue efforts thus far. Materials and energy shares, however, have moved with commodities to near bear market lows. Industrial and technology shares are also reflecting lowered estimates of economic growth. The collapse of bond prices , reflecting increasing concerns over default, along with those falling commodity prices and materials shares, suggest that this is a market increasingly concerned over deflation and a...