The Cyclical Rally

The S&P 500 continues to charge higher. The index made a run at 2,000 this morning, but it has since backed off. We got as high as 1,999.31. With a number like that, I assume traders took note.

The recent rally has been led by Cyclical stocks. By that, I mean stocks in three sectors: Energy, Materials and Industrials. Here’s a look at the relative strength of all three.

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I apologize for having two black lines, but I couldn’t find another way to do it. The Industrials line is the lower one in late July but ends as the highest of the three by today. Energy is red and the other black line is Materials (if that helps clear things up).

Naturally, this is a turn to Cyclicals after a long stretch in which they lagged.

Posted by on October 7th, 2015 at 11:40 am


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