Prior to the drawdown which began on May 10th, it wasn't that hard to make money in stocks. Prices were moving higher, although in a bumpy fashion, and the leading Business Sectors and Industry Groups were clearly evident. Even though the market appears to have made a bottom on June 13th, and August produced its best performance in six years, it hasn't been that easy to make money lately. So where are the leaders, i.e., stocks that are going to move this market higher?

I have read that Big Pharma is ready to make a move, Large Cap stocks are the place to be and a Tech rally is in the making. Barron's Magazine even suggested that you might want to buy some beaten down mortgage finance companies, home builders or appliance makers. Give me a break. I want to find rising stocks in rising Business Sectors. Not any Sectors, mind you, but Sectors that have what it takes to become leaders.

If I click on Viewers in the Main Menu Bar and click on Sector Viewer, I am presented with a window showing the VectorVest Business Sectors, ranked by Relative Timing, RT. The top ranked Business Sector as of yesterday's close was Utility. A 1-Year, Daily graph of this Sector shows that its Price took about a 10% hit in last October's pullback; then slowly worked its way back up to its former high. The move was so sluggish that RT peaked at a modest level of 1.12 on May 5th when it hit its Price peak at $29.25. Its Price came down with the rest of the market in the May drawdown, but a funny thing happened to its RTRanking. It went up.

To see this on your graph, use the "Edit Field List" to add RTRanking to your available graphing parameters and click on it. Amazingly, Utility's RTRanking was going down late last year and early this year while the market was moving higher. It hit a low point of 39 on March 27th. This means that the Utility Sector's Price performance was the second worst of the 40 Sectors we track. On April 3rd, its RTRanking jumped to 36 and proceeded to move higher as its Price went down. In this instance, the Utility Sector's Price performance was improving relative to the other Business Sectors. Its Price has been going up since June 14th and its RTRanking hit the best possible level of 1 on July 21st. Since then, its RTRanking has remained at 1 except for two days.

How can all of this help you make money? Well, by using RTRanking to analyze the Utility Sector, I saw that it ran counter to the broad movement of the market. Therefore, the Utility Sector can't be a leader. In fact, it's telling me that the market isn't doing very much in the way of going higher as long as the Utility Sector holds the number 1 RTRanking. On the other hand, Steel was definitely a leader as its RTRanking exploded from its 10/20/05 bottom and locked onto the number 1 position for months at a time. I don't see anything like that happening right now, so I'm still Looking For Leaders.