Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

The Lead-Lag Report: Weak, Weak, Weak

By

This week's Lead-Lag Report continues to warn investors that a potential correction could occur in October. Weakness continues, and unless earnings cause a change in intermarket trends, caution remains warranted.

PrintPRINT
LAGGARDS: MANY MORE WEAK PERFORMERS

Energy (NYSEARCA:XLE) – Downward



Comments: It appears that energy continues to try to find a trend as its recent underperformance causes its relationship to the S&P 500 to fall back to early September levels. It is curious to see that energy stocks have not surged further given open-ended monetization by the ECB and the Fed. It appears that reflation is not being confirmed in the here and now.

Small-Caps (NYSEARCA:SLY) – Broken



Comments: Small-caps continue to underperform in a meaningful way. It appears that QE3 has not spurred animal spirits in higher beta stocks, and the trend remains down for now until more clear and comfortable risk-taking occurs. The ratio may retest the June 4 low.

Technology (NYSEARCA:XLK) – Destroyed



Comments: Technology has gotten destroyed in recent days relative to the S&P 500 on Apple (NASDAQ:AAPL) manufacturing concerns, and a general feeling of profit taking relative to the broader market. The trend remains down and severe weakness could persist into earnings season.

Conclusion

Market internals continue their trend of deterioration entering into earnings season. Could a correction be averted if markets like earnings announcements to come? Absolutely – but for now, caution remains warranted.

Twitter: @pensionpartners
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE