Sectors Relative Strength Analysis

Sector relative strength analysis not only reveals market leadership (or lack thereof) but also the underlying drivers of the stock market trend. I find relative strength analysis an important and critical tool that reveals the complexion of the trend.

In my June 27th commentary, I suggested that the gold shares were displaying dominant relative strength.

The following charts, displaying sector relative strength to both stocks and gold, clearly illustrate this dominance.

Relative Strength to U.S. Stocks:


Relative Strength to Gold:


On May 19th I implored investors to stand your ground, or face the big boot upon resolution of this breakout. The big boot still waits at the end of this breakout for those that cannot withstand the headline fear.

Big Boot: