Our weekly EdgeCharts display the relative strength rankings for three major market groupings (sectors, styles, and global). Rankings are determined by the intermediate-term momentum of ETFs representing each of the individual categories. Momentum values are annualized to indicate the strength of the intermediate trend (a value of +20 means the category’s intermediate-term trend is sloping upward at the rate of 20% per year).

Sectors: Telecom jumped three spots higher to retake the top sector ranking it held four weeks ago. Utilities, the interim occupant, slid down a notch to second. Real Estate held steady in third, and the rise of Telecom pushed Materials two spots lower. Technology and Consumer Staples remained a closely coupled pair and moved ahead of Industrials. Consumer Discretionary continues to languish in the lower half despite recent strength among homebuilders. Financials lost some momentum but managed to improve its ranking due to the more pronounced weakness in Energy, which dropped two spots to last place. Health Care finally made the transition from red to green, registering its first positive momentum score since the first week of January.

Styles: Mid-Cap Value and Mid-Cap Blend extended their reign at the top to a fourth week. The next grouping of style categories closely resembled a six-way tie a week ago, which led to significant shifts in their relative positioning this week. Large-Cap Growth moved to the top of this group, and Mid-Cap Growth followed. Mega-Cap also posted an improvement. These advances came at the expense of Small-Cap Value and Large-Cap Value, which each slipped four spots lower. Although the dispersion in momentum scores has increased slightly this week, these six categories in the middle all remain with four points of each other. As such, it would be premature to declare that Growth has retaken the leadership mantle back from Value. The bottom three categories remain the same. Small-Cap Blend, Small-Cap Growth, and Micro-Cap were all able to increase their momentum this past week, yet they continue to trail the field.

Global: Global weakness is evident as four categories turned negative, breaking away from the unanimous lineup of positive momentum scores a week ago. Japan is the primary culprit, swinging from a slightly positive trend to a double-digit negative momentum score. It fell back into last place, and its poor results occurred despite a huge 9.6% surge in the Japanese yen since the end of January. Currency-hedged Japan funds have performed even worse, with the WisdomTree Japan Hedged Equity ETF (DXJ) showing a 19% loss for the year. The Eurozone, EAFE, and the U.K. were the other three categories to slip back to red today.  Renewed weakness in the U.S. dollar over the past two months would normally provide a boost to foreign categories, but the U.S. has defied conventional wisdom by climbing a notch against its foreign competitors this week. Although there are no changes among the top-three ranked global categories, they all posted momentum declines. Latin America remains heads above the crowd and has a comfortable command of its leadership position. Canada and Emerging Markets retained their second- and third-place spots, respectively. Pacific ex-Japan, the former fourth-place occupant, slipped two places to sixth. Again, this weakness developed despite the category receiving a significant currency translation boost.