The Weakest Sectors have Bounced the Most

If one takes a look at the ten major sectors rated by macro trend, 1 being the most bearish, 10 the least bearish (all are in downtrend), we find that the most bearish have had the biggest short term rally as measured by RSI ( 30 being low and 70 being high).

  1. XLE    Energy                                current RSI 64.7
  2. XLB    Materials                            current RSI 62.4
  3. XLI     Industrials                          current RSI 63.3
  4. XLP    Consumer Staples              current RSI  64.1
  5. XRT   Retail                                    current RSI  49.7
  6. XLU   Utilities                                 current RSI  58.2
  7. XLK   Tech                                      current RSI  58.7
  8. XLF   Financials                              current RSI  53.6
  9. XLY   Consumer Discretionary     current RSI  57.7
  10. XLV   Health Care                           current RSI  48.0


  1. we are towards the end of a bounce that is to a certain extent being driven by Middle East turmoil.

2.  If the S&P is over 1960 on the day before the next FED meeting I would venture that we have a 75 % probability of an interest rate raise.

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