Sector Sum Indicator is Warning Stock Market is Risky
Sector Sum Indicator is Warning Stock Market is Risky. The sector sum indicator measures the number of bull trends among the 45 industry sectors to determine market risk, and whether the market is about to reverse itself. The chart from Investors Intelligence shows the indicator is close to +30, which means most of the 45 sectors are overbought, and risk is high for a downturn. You’ll note during the past year that a high-risk indicator was followed by rocky times. Conversely, when the indicator was extremely low, -30 and below, the markets moved up. In other words, reversals from high levels are bearish for the market. Upturns from the lows are bullish for the market.