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.
$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.
$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.
$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.
$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.
$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.
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.
Come by for a free trial and get the Sunday video with setups and analysis.