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Tuesday, February 07, 2012

Markets Becoming More Defensive?

Below are a series of percentage comparison graphs of a number of markets. They compare money flow between the first week in February and so far this week.

The first graph depicts gains made for the Major Sectors during the first week in February. The Financials sector made the biggest gains that week, with no losses for any sector.


The second graph depicts gains/losses made for these Major Sectors so far this week. Note the drop in the Financials, Industrials and Materials sectors, and the increase in the Utilities and Health Care sectors...indicating a preference for more defensive stocks so far this week.


The third graph depicts gains/losses made for the Major Indices, DVY, EEM, Gold, Oil, Copper, and JNK during the first week in February. There was notable buying in EEM, DVY, and the Russell 2000, moderate buying in the Dow 30, S&P 500, Nasdaq 100, and Copper, and tepid buying in JNK. There was selling in Gold and Oil.


The fourth graph depicts gains/losses made for these same markets so far this week. There was a marked increase in buying in Gold and Oil, while the Russell 2000 and Copper sold off into negative territory. Buying in the other markets continued this week, but to a greatly reduced extent. This indicates a reduced appetite in risk for equities and a greater desire for Gold and Oil (perhaps as a hedge against a potential downturn in the equities markets as they battle against some major resistance levels).


The fifth graph depicts gains/losses made in a variety of currency markets during the first week in February. The biggest gainer was the Aussie Dollar, with the U.S. Dollar declining. There was moderate buying in the Canadian Dollar and the British Pound, and mild buying in the Euro.


The sixth graph depicts gains/losses made in the same currency markets so far this week. The Euro garnered the most interest, with continued buying in the Aussie Dollar and the British Pound, and a much-reduced interest in the Canadian Dollar. The U.S. Dollar continued its decline...however, I would note that in both Week 1 and so far in Week 2, the U.S. Dollar hasn't declined percentage-wise to the same extent that all the others have gained...it appears to be holding up, so far, in February...will see if this continues to the end of this week, or not. 


I'll look at these graphs again this weekend to see how these markets performed in February's Week 2 as compared with Week 1 and where the money flow ended up this week, and how the U.S. Dollar fared in comparison with other currencies.