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Bear Market Bounce or Is the Bottom In? |
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With the market at such oversold levels near the beginning of March it was inevitable that we would eventually see a reversion to the mean. Nobody knows for certain if the ultimate bottom is in, yet the SECTOR SCORE ranking engine is still bearish for the longer trend timeframe and is signaling the market could roll over again soon. The fact that Financials, Banks, Real Estate and Industrials led the rebound in light of such continued pessimistic fundamentals definitely makes it feel like we have come too far, too fast over the last 30 days.
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Bear Market Continues Its Downward Course Leaving Few Sectors Untouched |
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Sunday, 01 March 2009 00:00 |
DOWNSIDE SLIDE CONTINUES
Few sectors or asset classes were spared in February as bad economic news continues to pile up. On an absolute basis almost every sector had negative returns during the month. On a relative basis the safest sectors to be in were precious metals, cash, and bonds. If you had the stomach for shorting sectors and inverse ETFs then 2009 has treated you well. The other asset class investment that has beaten virtually every sector so far this year is cash! REAL ESTATE, INDUSTRIALS AND JAPAN HIT HARDEST
The deleveraging of asset values continues to drag down economically sensitive sectors to new lows. Grim GDP data and a host of other economic indicators point to more pain ahead in the short run as all types of consumption continues to constrict, whether its households, suppliers, producers, businesses, or institutions. It seems like everyone is in lock down mode right now, trying desperately to wait out this economic storm. With 12 year lows being tested in the S&P 500 index this week,
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