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04/23/17: The readings on our Sector Performance models indicate that a tug-of-war continued to occur over the week ended April 21 between optimistic and cautious stock market participants, with stocks of companies that operate in three cyclical sectors of the U.S. economy — in the Consumer Discretionary, Basic Materials and Energy sectors — ranking as the first-, second-and fifth-better-performing stocks, on average, over the six weeks ended April 21, 2017, and stocks of companies that operate in two defensive sectors of the economy — in the Consumer Staples and Utilities sectors – ranking as the third- and fourth-better-performing stocks, in terms of their relative price performance, over that period. That tug-of-war resulted in U.S. stock prices, in general, moving in a narrow sideways range over the past nine weeks.
Although the on-going battle between optimistic and cautious stock market speculators and traders suggests that U.S. stocks will continue to move in a sideways range over the next few weeks, the fact that our proprietary Sector Performance Index moved lower for the third consecutive week during the week ended April 21indicates that cautious stock market traders were more active in the U.S. stock market during that period. However, the fact that the rate of decline in our Sector Performance Index slowed considerably during the week ended April 21 suggests that U.S. stock prices, in general, will continue to rebound over the next few days after rallying sharply on Friday, April 21.