My Amazement About Those Turning Bullish On The Banking Sector Now

With the Nasdaq continuing higher this past week, it has now reached our minimum target we were looking for before a pullback may be seen. But, I think the XLF may be providing us with certain clues about how 2018 may turn out. And, it may not be as rosy as many believe. Well, at least […]
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Amid Bad Fundamentals, Gold Sector Rally May Have Begun

See edit at end, adding in the favorable gold and silver CoT. We have been expecting a seasonal rally in gold, silver and the miners off of a bottom due in either December or January, as is typical of the sector. I’ve marked up Sentimentrader‘s seasonal gold pattern to show the secondary low made (on […]
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Technology Sector Up 34% in 2017

As can be seen on the Year-to-date percentages-gained/lost graph below, the Technology sector (XLK) leads the other eight major sectors in gains, so far, this year. It’s in a fairly smooth, strong uptrend, and has been relatively devoid of much volatility, overall, compared with the other sectors, as shown on the 1-Year Daily charts below. The longer-term Monthly chart below shows that XLK is approaching […]
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Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom

This was going to be part of an NFTRH update, but I decided to make it public, as we’ll have plenty of other information to work on this weekend in NFTRH 474 after such an eventful market week. With all due caveats about the non-stellar gold CoT data (we’ll update in #474) I wanted to […]
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Nine Sector Grid Overview Shows Bullish Strength

As the market jumps to another new all-time high, let’s step inside the market to see money flow among the nine sectors.

It’s revealing a bullish picture as this grid helps us visualize what’s happening beneath the market.

Here we go!

We’re seeing our Nine Sector Grid with the AMEX Sector SPDRs in our Sector Rotation Style.

The top six ETFs are in the “bullish” or “offensive” group while the bottom three are “defensive.”

We use this logic to cross-check if money is moving toward Risk-ON or Risk-OFF activities.

Let’s just ask which sectors are outperforming the others – we just look at the hourly price trend:

Financials (XLF), Tech (XLK – except for today’s down-gap) , Discretionary (XLY), Industrials (XLI), Materials (XLB), and even Energy (XLE).

Our three “bearish” or Risk-OFF sectors are showing money flow OUT of these groups with the exception of Health Care (XLV).

Staples (XLP) and Utilities (XLU) are hitting new swing lows via intraday downtrends.

For the moment, the situation remains “Risk-ON” bullish or offensive in terms of money flow among sectors.

Continue watching this picture for any sudden changes in money flow across our sector grid.

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Corey Rosenbloom, CMT

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Tech Sector Close to Forming a “SELL” Signal

The Technology ETF (XLK)  is close to forming a “SELL” signal. Two of the three technical indicators on the Daily chart below have done so, as of Friday’s close, while the RSI threatens to join the MACD and PMO if it crosses below the 50 level. Price action this week, following its all-time high made last Friday, has been overly […]
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Tech Sector Holds The Key

As of mid-day on Friday (April 21), and during the past couple of range-bound months, the Technology sector is outperforming the large-cap and small-cap stocks, as shown on the following charts. It’s still sitting above both its 20 and 50 day moving averages, while the Dow 30, S&P 500, S&P 100, Nasdaq 100, Nasdaq Composite […]
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Something Strange in Sector Relative Strength Jan 5

What signal is money flow across sectors sending, and what’s strange about it?

Let’s take a look at our nine Sector money flow model and hear the message from the market:

Here’s what we’re seeing in the nine line charts above:

It’s each of the nine AMEX Sector SPDRs (XLF Financials, XLU Utilities, etc) in a Relative Strength Line.

In other words, the chart is NOT the price, but the relative strength line to the S&P 500.

When the line chart is RISING, that means that the ETF is rising faster than – or stronger than – the S&P 500.

Similarly when the chart is FALLING, the ETF is falling faster than – or weaker than – the S&P 500.

The purpose is to go beyond the price and measure each ETF with the same metric – the S&P 500.

In a rising market, you’d expect to see the top three “bullish” or offensive sectors strong and that’s what you see…

Except for one.  Notice how XLY Consumer Discretionary has been downtrending all of 2016 and the RS Line just hit a new low this January.

That’s not supposed to happen!

We’re seeing the three Bearish or Defensive groups – Staples, Health Care, and Utilities – all trend downward which is expected in a rising/bull market.

Everything is stable with the exception of Consumer Discretionary – be sure to keep an eye on stocks in this group.

We generally want to find strong stocks in strong trends in strong sectors – like Financials right now.

We want to avoid buying weak stocks in weak sectors like Health Care or Consumer Discretionary.

In fact, both Consumer Groups are “weak getting weaker” (XLP and XLY).

Continue monitoring the Relative Strength Lines in these sectors and what it suggests about the market – bullish at the moment.

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Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


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