Market Momentum for 2-19-09

Market momentum is strong – strongly negative.  The Dow Jones Industrial Average closed at a new 52-week (and six-year) low today.

Sectors

Health Care is atop our sector rankings but is having trouble getting past resistance formed by highs of the last four months.  Technology is holding onto the # 2 spot and is still holding above its January lows.  Utilities are in third place but broke down significantly in the last week.  In fact, every sector is in some stage of breakdown.  Even Consumer Staples seem to have lost their “defensive” allure.  Financials, Industrials, and Materials are still on course for oblivion.

Styles

Extremely bearish negative momentum.  A pattern is taking shape in the Style Edge rankings: the three Growth categories are on top while the three Value categories are on the bottom.  Large Growth, Mid Growth, and Small Growth are all holding above the January lows.  Their Value counterparts are more of a mixed bag, with Large Value looking more vulnerable than Mid Value and Small Value.  The previously strong (on a relative basis) Mega Caps are now straddling the midline of our rankings.

Global

World markets are still showing extreme volatility.  China is rolling over to the downside again, while Japan and the rest of Asia are plumbing new depths of despair.  Latin America is still the best region but keeps hitting resistance, similar to the Health Care sector action.  Canada is unable to sustain a rally while the U.K. and EU are breaking down further.

For additional information on how to read and interpret the charts, please consult our User’s Guide.  This weekly analysis is available with free subscription to Invest with an Edge.