Sector Detector: Fed sticks to the script, but not all investors are comforted

Courtesy of Sabrient Systems and Gradient Analytics

Is it just me or has 2015 been a particularly crazy year? From extreme weather patterns, to a circus of a Presidential election cycle, to divergent central bank strategies, to the first triple-crown winner since 1978, to terrorist plots emanating from our neighborhoods, to counterintuitive asset class behaviors, to some of the most incredible college football finishes — just to name a few. So, it only seems apropos to cap the year with Steve Harvey messing up on announcing the winner of Miss Universe the other night, only to correct his mistake after allowing the first runner-up to walk around with the crown for a couple of minutes before taking it away from her. It is much like the tug-of-war in stocks this year, in which the bulls walk around with the crown for a short time before the bears take it away for their own brief walk on the runway. But neither side can progress very far.

Although both the technical and fundamental pictures are murky, leading many investors to take chips off the table for the holidays, there are signs that the path of least resistance in 2016 will be to the upside.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Market overview:

As we at Sabrient gear up for the unveiling of our eighth annual Baker’s Dozen top picks for the New Year, I am looking forward to being on the road for pretty much the entire month of January, speaking with financial advisors across the country. I was in the Washington D.C. area last week and enjoyed some great meetings with advisors there. When I am in Florida in late January, I am excited to set aside a couple of days to attend part of the Inside ETFs 2016 conference in Hollywood, FL, which takes place January 24-27. ETF.com has provided me with a discount code to share with advisors who might want to attend: IE16-SM. If you attend this premier ETF event, please be sure to look…
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