Weekend Review and Watchlist

I apologize I'm posting this a little later than usual as I've been traveling this weekend, so this will be a briefer version of our regular overview and commentary.

Overview

The major indices were lower on the week, with a 1% loss in the S&P, but bigger hits to small caps with the Russell down 2%, and specifically to Healthcare -3% and Biotech -6%.

On an intermediate basis not much has changed however. The broader market still appears to be consolidating and retesting the breakout level from July, accompanied with deteriorating breadth and increasingly negative sentiment.

Here's the S&P on a daily and weekly basis:-

.

The decline in the Russell 2000 took it to its lowest weekly close in 3 months, giving back some of its relative outperformance vs the S&P since the February lows:-



.

Transports held up relatively well and remain above their 10-wk MA:-


.

Breadth has deteriorated in recent weeks potentially bringing its long term trend under pressure:-


.

Sector Analysis

Tech ($XLK), Energy ($XLE), and Financial Services ($XLFS) are the leading sectors on a relative basis, and the only three still above their 50-day MA. They're followed by Financials ($XLF), Consumer Discretionary ($XLY), Industrials ($XLI), and Basic Materials ($XLB).




.

Staples ($XLP), Real Estate ($XLRE), and Utilities ($XLU) all made progress on the week but remain below their 200-day MAs. Healthcare ($XLV) is now at the bottom of the pile, slicing through its 200-day MA this week to finish at the lowest level since 6/27/16.


.

Alpha Capture Portfolio

It was an ugly week for our portfolio, getting hit -3.9% vs -1.0% for the S&P. Our position in ILMN took its toll as well as weakness in small cap and growth names. There are no new signals this weekend, leaving us with 8 names and over 25% in cash.

.

Watchlist

More financials are coming through for us, and although tech is still strong overall, the number of setups is definitely on the wane. Here's a sample from our full list of 25 names:-

$BAM

.

$PFG

.

$AIG

.

$APC

.

$VMW

.

$SSTK

.

$NFLX

.

$JWN

.

Posted to Alpha Capture on Oct 16, 2016 — 4:10 PM

Recent free content from Jon Boorman

Comments on this post have been disabled by the Maven.