Evaluating The Overall Market: And Determining Where To Put Money To Work

I like to keep tabs on the various sectors of the S&P. To do this, I have taken the advice of Dr. Brett Steenbarger and created a couple of watch lists that include the 10 different sectors of the S&P. I have a real time watchlist through my broker and I also use Stockcharts.com's candleglance feature. This allows me to bookmark a page that consists of 10 charts for the symbols that I enter (the 10 sectors of the S&P in this case). For those of you that are not familiar with it, here's what it looks like and here's the link to the candleglance page shown below:
This allows me to stay in tune with what sectors are doing well and which ones are not just by "glancing" at the charts on the page. As you can see from the above picture, energy is looking pretty rough right now (just broke the neckline of a head and shoulders as prices are hitting new recent lows). I like to glance at the stochastics also to see which sectors are overbought, oversold, and neutral.

Doing this helps me filter out various trades that I'm considering making. If a stock that I'm considering is in a sector that's not doing so well, or is heavily overbought, I will probably pass up that trade and look for somehting else.

Just some food for thought. Make sure and check out the candleglance feature over at stockcharts.com, it is a very valuable, yet free, tool.

TLT