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So what does the last four tops in the S&P 500 have in common? If you look closely at the chart below, you will notice that the RSI(14) indicator for the % of stocks above the 50-day moving average was on the cusp of breaking below the 50% mark (click to enlarge).
The first week of the new year saw the broad market index advance 1.05%, and some big winners and losers among the sectors. Let's take a look (click on images for enhanced viewing):
Automobiles and Parts was the big sector winner. GM (+5.75%) and F (+8.8%) were big contributors along with LEA (+7.18%) and MGA (14.83%). HOWEVER, the auto parts stores had a drag of a week. Big sector losers were Gold Miners and Platinum and precious metals–largely a reaction to the USD's strength. Here are the top/bottom performers (using sub-sectors):
Home Construction experienced a surge with KBH's good news. This sector is heavily shorted and the bears got caught with their hands in the honey jar. I created a chart book for you with the short interest and the weekly charts.
Let's take a look at the broad market index:
There is some negative divergence between the oscillator and the price action; however, the daily chart is not extended relative to the trend line. Earnings will be coming out soon and will feed the charts with new information. As we know, it is not the news, but the market's reaction to news that is instructive.
For your weekly research, I've prepared a chart book for you on the major sectors as well as some weekly change in price and short interest on subsectors. You may download it here (9.1mb).
Disclosure: I have no positions in any stocks mentioned.