Short-term price momentum has turned down for US stocks, according to Robert Colby, Chief Investment Strategist at Robert W. Colby Asset Management.
In his report, Colby says that the RSI on the broad-based Wilshire 5000 has clearly turned down. This follows on from early warnings in July and August which came from bearish divergences between the index and the RSI, i.e. as the index reached new highs, the RSI did not. See Chart.
Colby has also ranked the nine major US stock sectors according to relative strength for the medium, long and longer-term (see Table below). In the medium-term Technology and Financials look most likely to outperform. See methodology.