Sector Spotlight: This Is What A Commodity Rout Looks Like

• Posted by DynamicHedge
• on May 6th, 2011

Commodities got crushed this week with Silver ($SI) finishing down -25%.  Two weeks ago the energy/basic materials trade was what was working well (albeit late in the game).  Not suprisingly, healthcare and defensive consumer names have held up well in this correction.

Winners: $MDT, $UNH, $BMY, $TGT, $KFT

Losers: $NOV, $BHI, $FCX, $DVN, $SLB, $HAL, $COP

I’m keeping an eye on financials as a sleeper trade in this pullback.  Stocks like $V, $MA, $AXP, $JPM, $C (which also has a catalyst) have barely pulled back as the S&P shed 30 handles.  They might be finally worth a look for a trade.  The losers chart below looks a bit broken.  Large cap energy names are probably due for a more prolonged pause/pullback.

Despite all the setbacks I still think this bull market has yet to turn everyone into believers.  Lots of pros still talking bear market rally.  Make no mistake, we are in a bull market for stocks for the remainder of the year.  I gave up all that angsty Armageddon talk years ago, I’m a family man now.  That said, it’s always possible that the S&P sees 1300 before it has sees 1400.

Do yourself a favor and delete $SI_F and $SLV off your watchlist for a few days.  People are hyperventilating and it’s not healthy.

Winners:

Losers:

blog comments powered by Disqus