web analytics

I find it useful to drill down into each major sector and look at the behavior of individual names. One way to do this (and one I highly recommend) is to flip through charts of the entire S&P 500 every day, but that is time consuming and not the right answer for all traders. Another way, which I also do daily, is to look at summary statistics for each sector. The table above shows an analysis of most of the components of the S&P 500 by sector. (Most numbers are the averages of those values for the individual names in the sector, with the exception of the Vprem, with is premium of the monthly – quarterly historical volatilities for the relevant sector ETF.) RS is a relative strength measure, STH, STL, LTH, LTH show the percentage of stocks making short term (20 day) and long term (252 day) highs and lows on this day in the sector. C%MtnRng and C%YrRng shows the average value of the closing price as a percentage of the monthly or yearly range—a rough relative strength measure. In a broad market decline, pullback, pause or consolidation, it is interesting to see which sectors hold up best, and which show early signs of new upside leadership—bets placed in leading sectors are often rewarded handsomely when (if) the market turns and resumes its rally. There is valuable information here; how you incorporate it in your own trading plan is worth some careful consideration.