Look at all these sector rotations! Welcome to the new regimeRecently we've seen a significant "rotation" in markets toward large cap tech and defensives, and away from small caps, financials, and transportation. In this post, I will describe the rotation through a series of charts, and I will also suggest some explanations for what's going on. The long and short of it is that I think we've just witnessed a regime change, and markets are going to look very different for the rest of the year.
What's up: ecommerce, software, automation
After a long period of underperformance early this year, the software sector made a bullish trendline break vs. the S&P 500 at the end of May, and has been outperforming ever since:
Likewise the Global X Robotics & Artificial Intelligence ETF:
And the Amplify Online Retail ETF:
Note that the online retail ETF is outperforming despite recent weak retail sales numbers.
What's down: airlines, retail, materials
While tech names have been breaking out upwards, we've seen downward breakouts in several other sectors that outperformed early this year. This includes most of the winners of the "reopening" trade, including airlines:
The "consumer discretionary" or retail sector has also rolled over, obviously with the exception of ecommerce:
As retail rolls over, we're also seeing some very bearish action in the materials sector. In addition to a sharp selloff in lumber, we also saw iron ore and gold take big dumps in the last few days. The materials sector has broken its uptrend relative to the S&P:
What's going on: weak demand and the Delta variant
Partly tech may be outperforming because of falling bond yields. Tech has been inversely correlated with interest rates since early this year. But I think a couple other factors are also in play. The economic data lately have been very disappointing, with weak retail sales, weak durable goods orders, and weak housing starts. A lot of consumers now say they are hesitant to buy a house, and initial unemployment claims ticked up significantly this week. The ECRI leading weekly index has been in a downward slide since mid-March.
All of this points to weakening consumer demand, which I think is why you see the retail and materials sectors falling so hard. The drop-off in demand is partly due to inflated prices, and partly due to the elimination of expanded unemployment benefits. Having already spent their stimulus checks, consumers now simply have less money to spend.
There's another factor, too, which is Covid-19 variants. The variant known as "Delta" has been ravaging India and spreading fast in the rest of the world. This variant is highly contagious and has been described as "Covid-19 on steroids." Meanwhile, the vaccine-resistant variants known as "Alpha" and "Beta" have been spreading in Europe and the United States. Alpha is now the predominant strain in the US, having increased from 12% of cases to 37% of cases in the last 4 weeks. With variants a growing threat, it's possible that some traders are hedging against a "reclosing" economy, or at least the possibility that consumers might travel less.
Another noteworthy shift: bonds over financials
Also note that financials have broken their relative uptrend, with a big drop today:
The selloff in financials was a reaction to the upward breakout in bonds:
It appears that we're headed into a new cycle of monetary stimulus and low interest rates, which means lower yields for banks.
Oddly, the US dollar also broke out upward today. I'm unsure what that's about, or how it fits in with the price action in bonds. Normally higher bonds and higher inflation would be bearish for the dollar.
What's threatened: aerospace, energy, and transportation
The aerospace, energy, and transportation sectors are so far still in an uptrend, although all three exhibited some weakness today.
You'd think that aerospace would fall along with airlines, but remember that the aerospace sector also includes defense, and we are increasingly under threat from China.
The transportation sector includes passenger travel like airlines, but it also includes shipping companies like UPS and FedEx. So ecommerce strength may offer some support, but this could still fall out of its uptrend soon.
The energy sector trades somewhat in sympathy with transportation, so transportation weakness could bode ill for energy. Energy is also inversely correlated with the US dollar, so today's upward dollar breakout could cause pain for energy. However, this sector is currently being supported by oil shortages and hype around the possibility that oil will reach $100/barrel.
Keep an eye on defensives, real estate, and biotech
Investors seem to be getting more and more defensive. That includes taking refuge in large, high-quality names. Large caps underperformed early this year, but that has changed in June, with the cap-weighted S&P 500 having broken its downtrend relative to the equal-weighted index:
It also looks like several defensive sectors are basing relative to the index. The relatively undervalued communications sector may benefit from the bipartisan infrastructure bill that's now near to passing in the Senate:
We're also seeing consumer staples, utilities, and healthcare find some support, though no big upward breakouts yet:
Surprisingly, real estate and biotech are also both seeing bullish movement relative to the S&P 500, so these are sectors to watch. Both are relatively undervalued due to having underperformed for a long time:
Retail
Sector early indicator? Retail sector - not much (but watch WMT)The general Retail Sector (as opposed to retailing of hardware home improvements by Home Depot and Lowes - studied in an earlier chart) - here represented by the VanEck Vectors Retail ETF (RTH, in green), and the mighty Walmart (WMT, in blue) - only occasionally (more often by WMT) acts as an early indicator against the broader market (here represented by the DJIA in gray, and the NASDAQ in black)... falling from peaks... WMT peaking on 29 Dec 1999, WMT falling from a peak in Jun 2007, WMT fading from a peak in Jan 2011, WMT in Jan 2015, WMT in Dec 2019.
Sector early indicator? Yes, the Hardware trade can be sometimesRelated to the Real Estate sector, trade in Hardware and Construction Materials - here represented by the twin titans of home improvement retailing, Home Depot (HD, in green) and Lowe's (LOW, in purple) - can sometimes act as an early indicator against the broader market (here represented by the DJIA in gray, and the NASDAQ in black)... falling from peaks in Feb 2007, Apr 2011, Mar 2015.
EURUSD 8-1 Long- Continued US InflationHere is trade set up on EURUSD based on current US numbers. With job numbers shrinking and an increase in wages and CPI the US dollar will likely continue to suffer. Furthermore, a stalled housing market and retail participation is concerning for the economy. I expect that these domestic changes will cause some more upside momentum for EURUSD. Add the seasonality index of the US dollar to this and this seems to be a good 1-2 week trade with plenty of upside potential.
$JD Shop made in china online and retail try the climbMarketmiracle advisor today gave an input signal for a LONG position in the title $JD
The company is basically an online and retail big store widely spread and known throughout China.
Through its online store it is also trying to target abroad by providing the portal in various languages.
I checked on some of my reference sites the situation and position of analysts according to which the company currently has a discounted price compared to the fair price.
Considering this I wanted then deepen the graph in search of a possible confirmation for the signal realizing that the title has suffered a powerful retracement from its recent historical highs and that now, in front of excellent macro data has quickly bent towards the ascent.
According to the combination of the two analyses above I expect a confirmation of the signal of Marketmiracle but you know, in the market the devil can always put his finger on it.
This idea is based on the signal generated by the Marketmiracle advisor whose link you can find by scrolling at the bottom of this page.
Strong Buy Now: The best setup digital AI company on the CSEBoy, I scan companies for a living and although this ones balance sheet (as I write this) may not be the best pick for VALUE today, it is certainly setup well for an earnings surprise going into Q2. The CEO has said they have realized over $1.5M USD of top line revenue with an entire MONTH left in the quarter.
Not to mention - he even said he fully expects to see $15M annually in the near to medium term. They closed HUGE contracts - one of which is for 50k retail locations and even have partnered with Intel; their own app RADAR is on Intel's DOMAIN . That is huge material news that's stayed under the radar on the *little volume* CSE.
This is my number 1 pick right now; this one will turn a lot of heads super quick. Also the chart is setup nicely for a long. Trade it, hold it, long term hold it whatever you chose to do just BUY it.
#ULTA: Nice uptrend hereNice upside with relatively low risk in $ULTA for a swing trade here. I can see this rallying until August 20th easily, and reaching as high as $426 as best case scenario here.
If price were to move below the white horizontal line this signal becomes invalid.
Best of luck!
Cheers,
Ivan Labrie.
Retail play on CapriWhenever there's a chance to get in at a lower price on a stock such as CPRI, we take the opportunity.
Overall retail will perform decently on re-opening theses and people returning to jobs.
R of 1.32 is decent although not the best, but with the potential for it to move, we can set alerts and move Stops to B/E at the alert ray
BBY Bestbuy Trades to watch for this week #1I am going to post about 5 trades or more to watch for every week.
Rules are simple.
Step 1-Watch price action wait for it to respect the trendline...Preferably the bottom trend line.
Step 2-When price stops, bounces, wicks back up over the trend line. That would be your first sign to get in.
Step 3-If you are more patient or skeptical, wait for price to move away from the trendline and then come back to it. When it repeats the Step 2, that's your trigger to get in.
Step 4-Make sure you have at least 30 days on whatever option you are picking.
Step 5- Try to pick a strike price that is at least the last previous High or the top of the candle after a gap down. (AkA in the money or slightly out of the money no more than that.)
if you have any questions please feel free to comment below on whatever it is and I will be sure to answer. If you aren't asking questions you aren't learning.
by iCantw84it
05.24.2021
Post-Pandemic reopening : It's a retail showtime!The vaccination campaigns are raising all over the world, but US is doing an incredible job to get this done very efficiently.
I am positive that the retails will spike in the next cycle due to the needs of the people to get back to in-person shopping experiences that are missed for more than a year at this point.
Dillard's performance showings clearly the first signals of this rebound.
DDS is breaking a super old resistance establish back in 2015, and the power of the break it's a clear signal that investors want to take the risk and jump on the long run.
Personally, I will wait for a retest of the resistance and confirm that will be a support to open my long position.
NANO MANIPULATION APPROACHYay, it's Friday! Our big-boys watchlist seems mixed today! Let's see how mid and low-caps tokens behave today!
This week, we have spotted big spikes in volume on some small-cap tokens. As we said yesterday, things are getting interesting. Those volume spikes may be responsible for the short-term manipulation that we were able to observe in BTC and ETH. That is blatantly occurring in other assets as well.
Today we are placing limit orders to start adding NANO. With a Fully Diluted Market Cap of 1Billion, we believe it has incredible long term potential since we have found an interesting use case for payments.
Through our manipulation approach, you can see where we expect whales to enter the market. You should follow the DCA strategy, but we have found that by providing manipulation insights, we can refine our entries as much as possible.
Nano offers secure and free transactions quickly. Would you use Nano on a daily basis?
Do your own research, Nano
Have a wonderful day, Alkalites.
Check our FREE Telegram Channel TODAY!
DXY - Liquidity Grab To Initiate Bullish Run What Is The Market Telling Us?
Price is currently ranging between Previous High & Previous Low
1st Break in market structure towards bullish direction since March
Price is currently making its way toward previous low for a retest
What Are Market Participants Doing?
70% of retail traders are shorting the dollar overall against DXY
There is currently over 450,000K short positions on the EUR from Dealer Intermediary (COT)
Institutional liquidity is sitting under sell stops of retail traders located below PDL
$GME Symmetrical Triangle and Pennant continuation pattern TradeCheck this out. Huge potential for big gains. Symmetrical Triangle with a Pennant continuation pattern inside. Pennants break to the side that created it. In $GME's case - to the upside we go.
*This is not financial advice, please contact your local HF (Hedge Fund) for that. Please do your own DD (due diligence) before assuming risk.
Doge ready to burn?Is this market overextended? Only time will tell. Will you get burned? Also, only time will tell.
Pretty much all the analysis is in the chart. I think its obvious that something fishy is happening. Just trying to spread some market awareness. DYOR, I am not a financial advisor, and please, for the love of god, manage your risk when you're playing in a market this volatile! Best of luck to you all!!
Crypto.com (CRO) Symmetrical TriangleBeautiful symmetrical triangle formation on Crypto.com (CRO). I'm loving how this is looking with these kinds of bullish market conditions. I believe if we break out of this formation we will have a run up and re-test of the current all time high of $0.27 cents. If we re-test and break past $0.27 cents we'll be going back into a new price discovery phase. Just my opinion.
When it comes to cryptocurrency adoption Crypto.com (CRO) is definitely at the forefront of integrating cryptocurrency with the retail, travel, and entertainment sectors of our lives. From just holding and staking I recently re-furnished me and my wife's apartment with those e-gift cards. I'm also ruby card holder myself. We're both lovers of Crypto.com.
But there's certainly much more that Crypto.com has to offer, what I mentioned we're just examples of what's in the ecosystem. This is is an awesome project that's in a lane of its own and at one point it was a top 10 cryptocurrency.
Much peace, love, health, and wealth as always.
TRAP FOR POOR RETAIL TRADERS on AUDNZDPrice has approached the top of a very visible parallel channel as well as a resistance area.
It's dangerous to trade short as big banks, hedge fund, institutions will have the opportunity of a big amount of liquidity that they will use to fill their orders. Basically they might drive the price higher with big capitals, and hit all retail trader's stops.
Be carefull.
SOKM Destek ve Dirençleri (Support and Resistence Zones)TRY 11 - 11.50 should be followed as a strong support for SOKM whereas 13.19 and especially 14.72 is being a strong resistence. If SOKM is able to break above, investors should aim for new all time high which is TRY 18.00.
This is not a financial advise.
SOKM için takip edilmesi gereken destek bölgesi 11-11.50 lira iken, 13.19 birinci direnç, 14.72 ikinci ve güçlü direnç olarak karşımıza çıkacaktır. SOKM, 14.72 seviyesini geçebilirse, 18.00 TL'ye kadar önü açık gibi gözüküyor.
Bu bir yatırım tavsiyesi değildir.