Stock and Sector Overview

Interesting week last week. Some sectors continued to unravel and some bounced. Time for a rotation again I guess. Anything that is a REIT continued to unwind. Apartment REIT’s, health care REIT’s, you name it.

$IYR continues to have the glide pattern of an anvil.

iyr2 300x199 Stock and Sector Overview

$XHB caught a dead cat bounce late in the week, so names like $LEN and $PHM acted well. Two days doesn’t a trend change make, but the ETF did retake its 200 day moving average. Builders should be on your watchlist as longs, it is possible they dried out.

xhb6 300x198 Stock and Sector Overview

$XLB Materials have been hot as names like $CLF, $WLT and $FCX have rallied from ridiculously oversold levels. The group was strong until Thursday though, as the sector broke a two month uptrend line.

xlb8 300x199 Stock and Sector Overview

$XLF   So are higher rates good for banks or what?? Double edged sword though. They make better vig with higher rates, but the trade off is a possible slowdown in housing demand. We’ll see how this all shakes out, but I still like the banks and they will be buys again soon. The ETF is only a buck off its annual high, so a move down to the blue line (100 day moving average) is certainly possible.

xlf31 300x197 Stock and Sector Overview

$IBB Ever since this ETF bumped its head at the top of channel it didn’t have  a shot. I should have taken my own advice on this and sorted the bejeezus out of it but didn’t. Would have been good for a fast 13 bucks. Now I’ll wait to get long. Names like $BIIB and $CELG have quietly gotten hammered over the last couple of weeks.

ibb13 300x199 Stock and Sector Overview

$XLK Technology broke its 20 day moving average thanks to $CSCO and general market weakness.  $GOOG is really struggling but $AAPL pulled up the rear thanks to Icahn. $AAPL was acting well before Icahn though and I think it has become a place where nervous money goes to hide out.

xlk4 300x197 Stock and Sector Overview

The market may be due for an oversold rally next week, although I’d like to see $SPX get down around 1630 first. We are running low on catalysts at this point and I see more confusion and uncertainty then clarity ahead so be prepared for chop and volatility. Its also August and moves get embellished. Good luck out there.

I may be back later with some specific set ups, but the pickings are slim right now.

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Joe Donohue

Joe is a full time trader with 25 years experience. He is a senior contributor and investor in Stocktwits and has been seen on CNN Money and quoted in Marketwatch, Forbes, Reuters, NY Times and Wall Street Journal.