A Large Percentage of Stocks Are Still Sleeping

Some of the strongest sectors that led the market higher at the end of 2016 continue to consolidate in tight multi-week patterns.  Take the financial sector $XLF which saw a 20%+ rally in just 5 weeks.

It’s now going on it’s 5th week of sideways trading without going anywhere.

Or the Transportation average which saw about an 18% gain in that same 5 week time-frame. These stocks have retraced about 35% of that move, very constructive early action.

Throw Industrials $XLI into the mix:

as well as the broad Russell 2000 $IWM:

and you have a large percentage of the market still sleeping through the new year and consolidating November gains.

This bodes well for the bull case, but with earnings season quickly approaching, it’s unlikely we’ll see much fresh money put to work ahead of the onslaught of headlines.

Thanks for reading, and good luck out there.

Oh and don’t forget to signup for our webinar tomorrow:

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Evan Medeiros

Evan is the founder of the Trade Risk. With 20+ years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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