Thursday, September 3, 2009

August 2009 Rewind - Running On Empty?

[GRAPHIC FIXED -THANKS!] Equities put in another august performance last month, but in some ways discussed below, the rally started to feel as if it were slowly running out of gas. For August, the S&P 500, Dow Jones Industrials and NASDAQ 100 cash indices once again posted positive results of +3.36%, +3.54% and +1.36%, respectively, leaving them all up nicely on the year.

While we have certainly seen some more obvious cracks in the market advance in the first days of September, I note below that there were some early warning signs last month in the lagging performance of the leading NASDAQ 100, and an actual negative result in the Small-Cap Growth stocks. So far the retrace has been mild at best. With the majority of earnings now out of the way, the reaction to tomorrow's jobs report may well set the tone for the balance of the month.

Sentiment: Positive
Volatility: Narrow (VIX 24-27)
Direction: Higher

[Click to Enlarge/ Weekly ETF Analyses]


The Style-Box was calculated using the following PowerShares™ ETFs: Small-Growth (PWT), Small-Value (PWY), Mid-Growth (PWJ), Mid-Value (PWP), Large-Growth (PWB), and Large-Value (PWV). The Sector-Ribbon was calculated using the following Select Sector SPDR™ ETFs: Materials (XLB), Industrials (XLI), Energy (XLE), Staples (XLP), Discretionary (XLY), Financials (XLF), Technology (XLK), and Healthcare (XLV). The Standard & Poors 500, Dow Jones Industrial Average and NASDAQ 100 may be traded through ETF proxies, including the SPY or IVV, DIA and QQQQ, respectively.

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