The $TSX has been the best performer over the last month. It has been awhile since we could say that!
You can see I greyed out the $TSX composite. That compares everything to the $TSX. The other main Money choices have under performed the $TSX. In order, the SP500, Money Market, US Treasuries, Canadian Bonds and lastly are the broad commodities. Obviously with the recent bounce in the gold market, that has really helped the $TSX. As well, the oil sector got some support with the crude rise over $100.
Zooming in on the sectors, this is what the map looks like.
We usually like to see this chart behave a little better than this. The up down nature of this chart would say indecision, not clarity. I have greyed out the $SPX button up top. I don't compare to the $TSX because the $TSX can be influenced by a couple of stocks. Remember the days of Nortel where it was 30 % of the index. The $SPX is so broad, it is more of a stable anchor. So let me use that for the reference. Jumping into the analysis, we have had a tremendous push in the Info sector. Metals have been the second best performing group. Not really a surprise with gold moving but its a huge change.
Energy has been flat really, and the utilities have sold off with the interest rate sensitivity. The good news is the offensive side of the chart (the left) is outperforming the $SPX, the bad news is the industrial and energy sectors are just treading water.
So how do we use this information? We need to keep track of the strong sectors so we can outperform the market. Currently, the info sector, the metals and healthcare would be the top three. Not a real trend there. Compare that to if metals, industrials and energy were the top three. Then you would see more of a bull market behaviour. The fact that 2 of those 3 are just keeping up doesn't make me as bullish.
The healthcare and financials are still outperforming the $SPX which are regarded as safety sectors.
I want to write a specific blog about market tops as well head into the fall. Am I calling for one? We are 6 years from the previous high. We are also at a point in time (the fall) where the markets are vulnerable. So I am not calling for one, but I am watching in case this happens. Why? The $SPX made a September push in 2000 and then rolled over. It did not quite take out the March high. In 2007, the $SPX market made a July high and pushed slightly above in October 2009 with less momentum. The only major global market I track that has also taken out the May high is France. France is still hovering near those levels. Germany is trying to break out, but hasn't yet. I'll get into more detail in the blog, but it is a very interesting time.
Good trading,
