Last week we saw a slight shift in sector rotation as money pulled out of the Consumer Goods and Conglomerates and found its way into Technology and Financials. Basic Materials took a hit last week and Monday as selling continued in that sector. Energy stocks were split giving no real moves in the energy sector as a whole. A few refiners still remain strong so it mixed for Oil names. Today was a mixed bag of tricks to begin the week as the Financials squeaked out a small gain along with Consumer Goods . Technology is trying hard to pick up the pace and gain some much needed ground to support the $SPX 1517 levels.
XLB ~ Basic materials struggle to gain its lost ground from last week but the trend is still very strong. My theory is the energy stocks are so fragmented that the XLB / XLE needs to rest and regroup for another leg higher. Bascic materials (XLB) should get lifted as XLE breaks out upon a well synchronized energy rally. The TradersThinkTank Model is long XLE. See the “Decision Making” TAB.
Below we see the Financials (XLF) are still strong and slowly grinding higher.
Below we see the Technology ETF (XLK) which is heavily weighed with AAPL, MSFT, IBM, T and GOOG. It’s finally starting to breakout and can pick up steam any day with a big range expansion move higher. RSI is showing momentum now as the ranges have been squeezed for weeks and months. I expect a big move and if these charts tell us anything, it should be higher.