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Wells Fargo shows relative weakness

Even though the S&P 500 is up sharply over the last four weeks, Wells Fargo (WFC) is just flat and shows relative weakness. After a surge the first few days of November, WFC traded flat with a small triangle. Watch this neutral pattern for clues on the future. An upside breakout would be bullish, but a downside break would be bearish.


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China and Japan Lag

Since early July, the Shanghai Composite ($SSEC) and the Nikkei 225 ($NIKK) have been lagging western European stock markets and the US. The PerfChart below shows the Shanghai Composite is actually down since July and the Nikkei is barely positive. In contrast, the US and western European indices are up over 15%.

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Precious Metals Lead Rydex Funds

The Rydex Mutual Funds Market Carpet focuses on the 17 sector funds. September is all about hard assets. The leading sector funds are precious metals, energy services, basic materials and energy. Consumer produces, utilities and healthcare show the smallest gains.

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Wal-Mart Shows Relative Weakness

Wal-Mart (WMT), which is the biggest component in RTH, is leading the way lower with a break below its 50-day moving average on Monday. Notice that WMT peaked at the 200-day moving average on 2-April and did not follow the broader market higher over the last two weeks. The king of retail is showing relative weakness.

Large Caps, Mid Caps or Small Caps?

 
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Long term answer: Mid caps.  Next question?