Looking at relative strength changes really helps to drive home underlying themes in the market. As I have been saying for several weeks, there are only a few sectors that have been going up — most sectors have been just treading water — and some sectors are completely falling apart.

Here are some recent relative strength changes, you tell me if you can spot the underlying themes:
New relative strength buy signals: Dominion Resources, Cross Timbers, Cal Dive International, Natural Gas and Worthington Industries (a steel stock).
New relative strength sell signals: Bank of America, more local and regional banks (too many to list), Enstar and Fortis (insurance companies), Black & Decker and Pier One Imports.

Remember that relative strength signals tend to last approximately two years (some longer, some shorter). By the look of things, I think this may be round two for the financial stocks (banks, brokers, insurance companies). And it doesn’t look like oil and other commodities are done yet either.

Now Go Talk About It!