Financials Lag As Transports Lead


  • Jason Goepfert

    Jason Goepfert

    Published: 2018-09-14 at 10:39:07 CDT

This is an abridged version of our Daily Report.

Stalling Financials trigger concern

Even as the S&P tickles a new high, Financials have struggled and are the worst-performing major sector over the past six months. The ratio between Financials to the S&P just hit a new 52-week low, which has been a warning sign, with negative returns over the next two months every time since 1999.

A Transportation myth

Investors believe a breakout in Transports leads to an imminent new high in the Dow Industrials. That hasn’t been the case, at least during the next month, as their record as a leading indicator is poor.

Renewed interest in boring stocks

A few months after being the most-hated sector in a year, interest in Consumer Staples is heating up. The XLP fund took in more than $350 million on Wednesday alone, the most among all sector funds.

A boost in Thai optimism

Among all country ETFs, the Thailand fund, THD, is highest, above 80. While such optimism is usually at least a short-term contrary indicator, when the fund has been below its 200-day average, readings above 80 have led to positive returns over the next year 100% of the time according to the Backtest Engine.


For access to the full report, indicators, charts, screens, and Backtest Engine, log in or sign up for a free 30-day trial today.

The post titled Financials Lag As Transports Lead was originally published as on SentimenTrader.com on 2018-09-14.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.


Follow us on Twitter for up to the minute analysis of market action.