From the latest weekly letter from Raymond James strategist Jeff Saut…
The call for this week: I am out of the country seeing institutional accounts, so these may be the only strategy comments for the week. In my absence the stock market will likely resolve its near-term directionality because the “selling stampede” is now 18 sessions long and such stampedes tend not to last for more than 17 to 25 sessions. Despite the decline, by my work there has been no Dow Theory “sell signal,” although there are some Wall Street wags who are using very short-term pivot points and believe otherwise. Still, the downside skein has left all of the indicators I monitor extremely oversold, suggestive of at least a near-term bounce. Such a rally would tell us a lot about the health of the market going forward in time, but if 1290 is violated I will need to rethink my bullish stance. Interestingly, all of the indices I track were up on the week with the economically sensitive D-J Transports (TRAN/5079.84) fairing the best with a 4.23% gain. Likewise, all of the macro sectors improved for the week with best being Materials (+3.72%).
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