Sector Rank Spread Moves Lower

The Sector Rank Spread moved lower last week. Although the earnings season does not officially start, many companies already reported earnings or will soon report it. As new fundamental data entering the ranking system, we are expecting to see fluctuations of the ranks and the SRS. At this point I wouldn't jump to any conclusion. Still a shrinking SRS reduces the tendency of sector rotation and add less fuel to the rally. As always, cautions are suggested.