Sector Spotlight: Six Weeks And Counting, Utilities Select Sector SPDR (XLU), Financial Select Sector SPDR (XLF)

This past week was all about the bounce that never came.  A lot of traders, including myself, were looking for some elasticity after so much selling pressure but we still went out on the lows of the week.  Financials and Service companies were very weak, and only the most defensive stocks in Utilities and Industrials finished in positive territory.  We gave up critical support and we should print somewhere in the 1250 area before resuming the uptrend.  This is a much needed correction and very good for the long-term health of the current bull market in equities.

Winners: $EMR, $MMM, $LMT, $ETR, $EXC, $SO

Losers: $C, $V, $BAC, $FDX, $UPS, $LOW

I’ve made a case for large cap tech stocks if you believe in the the longer-term bull market (which I do).  But before you get too stoked up on this pullback, take a look at the “winners” chart this week — we’re treading water, and that’s not a good sign.  Before the market can rebound we still need some more cleansing and stop running.  I like to see some solid life emerge from a bellwether before I get too excited.

Bellwether stocks to focus on this week are $GS and $FCX.  Stay glued to $GS — if it can catch a bid and start leading financials higher that will be your tell of a near-term bottom.



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