February 2024 barometer update
As expected, the FTSE 100 overextended itself during December and fell 300 points by mid-January. Since then it has done its best to make up this loss by closing at 7645 at the end of the month.
The Sector Rotation Clock continues to point to Early Expansion in the stock market cycle. Technology and Consumer Discretionary top sectors confirm this by being bullish. Here is the clock with the bullish and bearish sectors updated:
The dial has not moved since January and remains on the edge of Early Expansion. The top sectors which benefit from this stock market phase are Technology and Consumer Discretionary.
According to the Barometer the Consumer Discretionary sectors that are worth examining now are Household Goods, General Retailers, Media and, this month, Travel & Leisure. I have purchased a FTSE 250 house builder putting my money where my mouth is!
To summarise the indicators:
The Barometer has risen further to +3 as more sectors turn bullish.
The Hi-Lo-Grometer has moved back into the amber zone. This is the first time I have seen 52-week highs > 100 alongside 52-week lows > 100. The lows just exceed the highs. This implies a strong polarity within the stock market.
The US Treasury Yield indicator has now risen to above -150 points however there is a long way for it to go before it ceases to be inverted.
Last month I said “By January the stock markets will become over-bought and may need to consolidate before moving upwards once again”. The market has pulled back during January and hopefully has resumed its course upwards.
For further information, including the graphics, please visit: