The long-term equity cycle backdrop continues to improve as major US equity indices extend their October rallies to all time highs. Within equity markets cyclicals, notably financials and industrials, have broadly reaccelerated with their relative performance trends versus the S&P 500 finally reversing 2-year downtrends. This action continues to confirm the bullish view I have outlined here through the summer and fall.
This week saw a number of key technical hurdles breached. Financials and industrials continued to outperform, making increased relative performance highs that are now above their 200-day moving averages. In contrast, as noted below in the sector section, utilities and staples are beginning to break down right on track.
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