Cyclicals -- Relative Strength

The relarive strength of the cyclical stocks is a very helpful, but certainly not infallible guide
regarding how investors see the outlook for the economy, corporate profits and the stock market.
The cyclicals have recently regained favor vs. the general market and are now in a clear relative
strength uptrend. However, the relative performance of the cyclicals so far this year has been at
its shakiest since the economic recovery / cyclical bull market began. $CYC relative strength

The relative performance of the cyclicals has been in a downtrend most of this year. The top of
the downtrend channel is being tested right now, and it could be disappointing for the broader
market if the the cyclicals -- the bull market sector leader -- fail to continue to progress above
the very evident down channel in place over the next couple of weeks.

The upcoming slew of earnings reports may throw more light on the issue.