Weekly Sector Report – Week Ending September 15th 2017
Australia – ASX 200 Sectors
Another week, another sideways move for the S&P/ASX 200 index ($XJO). A promising start to the week saw the index close above the 50MA for the 11th time in 3 months, but despite gaining 0.4% on the week it was unable to hold above it. Financials ($XFJ) had its best week since November – gaining 2.9% – but Technology ($XIJ) was the strongest this week closing up 3.4%. Consumer Discretionary ($XDJ, +0.6%) was the only other sector gaining this week, with Materials ($XMJ, -2.2%) and Utilities ($XUJ, -3.6%) the weakest.
On the weekly Relative Rotation Graph®, only Energy ($XEJ, -1.0%) and Consumer Staples ($XSJ, -1.1%) are moving with increasing relative strength and momentum (ie moving in a north-east direction), with Materials starting to turn south-east this week. Health Care ($XHJ, -0.2%) is down 7% over the last 3 months and has just crossed in to the Lagging quadrant. Industrials ($XNJ, -1.5%) continues to show slight improvement in Weakening, but Telecoms’ struggles continue as it moves deeper in to Lagging ($XTJ, -1.5%).
US – S&P 500 SPDR Sectors
There’s no stopping the S&P500 index ($SPX) as it closed the week on an all-time high, breaking the 2,500 level for the first time to close up 1.5% on the week. Friday was the fourth consecutive all-time high and the 43rd over the last 52 weeks. Financials ($XLF) recovered last week’s losses to close up 2.8%, and Energy recorded its fourth weekly gain to close up 2.2%. Only two sectors lost this week: Utilities ($XLU, -1.1%) and Real Estate ($XLRE, -0.5%).
On the weekly Relative Rotation Graph® Technology ($XLK, +1.2%) continues to move further in to Leading, along with Utilities. Industrials ($XLI, +1.6%) has crossed in to Lagging, with Consumer Staples ($XLP, +0.2%) moving further north towards Improving.
Europe – STOXX Europe 600 Sectors
Unlike the Australian market, the STOXX Europe 600 Index ($SXXP) managed to cross above the 50MA this week (the first time since June) and close the week above it, gaining 1.4% on the week. As in other markets, Financials ($SXFINP, +2.5%) had a particularly strong week, followed by Consumer Services ($SXCSVP, +2.3%) and Oil & Gas ($SXEP, +2.1%). Technology ($SX8P) and Industrials ($SXIDUP) also gained 2% this week, with only Utilities ($SX6P, -1.1%) losing on the week.
On the weekly RRG, Basic Materials ($SXBSCP, +0.6%) moved further in to the Leading quadrant on a positive angle, with a similar trajectory to Oil & Gas – although that remains further to the left in the Improving quadrant. Despite this week, Utilities continued its reversal back in to the Leading quadrant, with Technology also heading back in that direction from Weakening.
Currencies – Daily Forex Relative Rotation Graph®
A 0.5% gain off last week’s lows for the US Dollar Index ($DXY) this week, but is still down over 10% this year. Nine of the major G10 currencies (and gold) are on the positive (right) side of the RRG, with the New Zealand Dollar ($NZD) also moving in a strong direction just shy of Leading. The strongest currency relative to the $USD is the British Pound ($GBP) which gained 3% this week to close at the highest levels since the Brexit vote in June 2016. Gold ($XAU) has rotated in to Weakening, with the short arrow of the Japanese Yen ($JPY) moving closer to Lagging.
Darren Hawkins, MSTA
Senior Software Specialist at Optuma
Darren is the senior Software Specialist at Optuma. He joined the company in 2009 after attending an introductory technical analysis course. Darren now instructs users all over the world, from experienced Wall Street traders and professional money managers to individual traders drawing their first trendlines.
Darren grew up in the UK and attended college in the USA where he earned a BA in Economics from St Mary's College of Maryland. He went on to spend a few years working at the Nasdaq Stock Market in Washington DC. Going on to live and work in Australia, UK and currently USA, Darren has a broad understanding of the individual needs of traders and investors utilising a wide range of methodologies.
In 2014 Darren passed the UK-based Society of Technical Analysts diploma course, and is looking forward to soon becoming a candidate for the Market Technicians Association's CMT programme.
When not looking at charts, Darren keeps a keen eye on England's cricket team—especially if they are playing against Australia. He recently moved to Charlotte, North Carolina with wife Wendy and their labrador, Gabba.