RJ Hamster
Three Sectors Are Holding Up the Entire Market
Don here…
The S&P 500 has gone nowhere.
Jeff Bierman overlaid the five largest sector ETFs on a single chart this morning and the picture told the whole story.
Retail, industrials, and healthcare are carrying the market higher. Technology and financials are underperforming.
Those three leaders make up roughly 25% of the index. Technology alone is over 30%.
A 25% tail is wagging a 30% dog. When those sectors give way, there is nothing underneath to catch the fall.
In today’s free session replay, you’ll discover:
- Why the S&P 500 is running on borrowed time. The market keeps repeating the same range while bearish divergences build underneath. The hourly MACD and RSI print lower highs and lower lows even as price holds steady.
- The consumer spending shift that tells you what to own. US retail sales stalled to close the holiday season. The top 10% drive 90% of spending. That is why Lululemon climbs while Coca-Cola gets crushed on a 3.5% revenue miss.
- China’s campaign to push the world away from US Treasuries.They are urging banks across Canada, Europe, and South America to reduce exposure. If yields push through the 5% handle, stocks face an allocation shift into bonds.
- The earnings lesson two stocks taught this morning. Spotify jumped $68 after being cut in half. Coca-Cola beat by two pennies and got sold. Deeply oversold stocks with lowered expectations bounce. Overvalued stocks with weak growth get punished.
Jeff is up 2% today on a flat market. He is running six shorts and eight longs.
He shorts individual stocks within the weakest sectors. He buys at 52-week lows in the strongest ones.
The key takeaway is patience. Jeff waited five weeks for the Coca-Cola trade and hit it the morning after earnings.
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
P.S. While Jeff watches sector rotation and bearish divergences, Blake Young watches something simpler: Dark Wire beacons that fire at 3AM showing institutional positioning before the opening bell. He doesn’t wait five weeks for setups—he scans overnight signals, trades two hours, done. January: 18.5%. Tomorrow 2PM ET, see how the overnight edge works.
Helping You Become a Better Trader…it’s What We Do. Experience TheoTrade® Today!
Whether you are a beginning, intermediate, or active trader, you will find a treasure chest of valuable trading education resources, both free and paid, that will help take your trading to the next level. We are committed to helping you become the best trader you can be.
Disclaimer: Neither TheoTrade.com or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or FINRA |SIPC |NFA-member firm. TheoTrade does not provide investment or financial advice or make investment recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction or investment.Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past Performance is not necessarily indicative of future results.
TheoTrade
PO Box 24790 Christiansted, Virgin Islands 00824
1 (800) 256-8876
Want to change how you receive these emails?
You can Update your preferences
Theotrade.com | Privacy Policy
