, we discussed broad market money flow and how we needed to see a reverse or at least stabilization in money flow in order to gain confidence in a move higher by the broad market. Yesterday we saw that change as exhibited on the chart below.

 

The most interesting aspect of the yesterday's money flow reversal is that it was largely driven by the telecommunications sector. Here are the facts. For every dollar that was transacted on a down tick, there were 2.61 dollars transacted on an uptick in telecommunications. This is a much larger ratio than average. To further emphasize the bullish trading in telecommunications yesterday, for every block trade executed on a downtick, 9.35 block trades were executed on an uptick.

 

This sort of trading activity is often the indicative of short covering. However, this sector has seen a steady decrease of investment from institutional players over the past three weeks so this could very well be new longs entering the space in anticipation of higher prices.

Companies in the telecommunications sector include ADTN, AMT, AMX, CIEN, CTL, FTR, LUK, NIHD, QCOM, RIMM, S, VMED, VZ, WIN, and T.