Top scoring weekly returns:  Buy and Hold 1 Year

History doesn’t repeat itself, but it does rhyme.” Mark Twain

Previously, I included a chart breaking out April’s historical returns by trading day. The chart, which averaged returns by trading day for the past decade, showed returns in April tend to struggle ahead of paying Uncle Sam. I’ve updated the chart to also show how April is playing out this year, and as Mr. Twain opined, history does indeed rhyme.

The best scoring sector across our 1,800 stock universe remains utilities. Basic materials has also moved above average in the past week (see later in this report).
Industrial goods and consumer goods score in line with the average universe score.

Healthcare, technology, services, and financials score below average. In healthcare and technology, managers should concentrate on mid and large cap. In services, focus on small cap. Consumer discretionary faces seasonal headwinds through summertime.

The following chart breaks out score by sector and market cap.
 

This next chart shows four, eight, and 12 week moving averages for our weekly scores. Typically, significant lows have occurred when scores have neared 50; although trading around those periods has been very volatile with yaw.
 

Utilities

The best scoring sector remains utilities, which benefit from historical seasonal tailwinds during the shoulder months ahead of summer demand. Since marginal pricing is based on natural gas, and natural gas tends to rally over the next two months (read on to see the natural gas chart), expectations for spot electricity market prices benefit. Total electricity production, and retail sales, moved higher through winter thanks to cold weather, prompting the EIA to forecast total electricity production growth of 1.8% in 2014. Watch how this impacts coal too, given higher natural gas prices have been supporting a shift back to coal based production and utility stockpiles are much lower than last year.