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).
- XLE Energy current RSI 64.7
- XLB Materials current RSI 62.4
- XLI Industrials current RSI 63.3
- XLP Consumer Staples current RSI 64.1
- XRT Retail current RSI 49.7
- XLU Utilities current RSI 58.2
- XLK Tech current RSI 58.7
- XLF Financials current RSI 53.6
- XLY Consumer Discretionary current RSI 57.7
- XLV Health Care current RSI 48.0
- 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.