Marketview: The Wrong Rotation

NOTE: I will be on vacation in Australia for the next 10-days.  I’ll try and post notes from the road.  No guarantees.

Many were looking for this market to rotate into the lagging sectors and give a another push for the bullish run. It appears that the market is rotating the wrong way as defensive utilities were the top performing sector this week.  Technology was notably weak, including the all important $AAPL.  It’s important to note that safety names like $PG, $PFE, $XOM, and $AEP were well bought this week.  I’ve mentioned all of these in the past.  I’m particularly attentive of downside risk when $XOM is a top performer in the $OEX.  This is where big money goes to hide out.

I’ve been finding it a little difficult to write anything clever or insightful about the market.  More and more I find the need to tune out the news because everything seems stuck on an endless loop of fear, uncertainty, and doubt.  What does matter is new material information and how the market reacts to it, but we haven’t had any decent new news in a long while.  Lately, hearing the same old stories drummed up is exhausting.  I’m sure I’m not the only one with headline fatigue waiting for the market to do something.

I thought for sure after Tuesday’s rip higher that the market would squeeze into option expiration Friday but it wasn’t meant to be.  Buyers are indicating that they’re not willing to press here.

The trend is still higher but how we get there is uncertain.  The market is telling me that caution is warranted.  My long-term out look is still for higher prices.  Could the market decide to to rip higher and take out the March highs?  Absolutely.  Could I be early on the caution and regret it.  Sure.  I still don’t think this is a market to chase higher.  Basically, I’m long caution, and short precision.

Winners: $BMY, $PFE, $PG, $WMT, $VZ, $KFT, $XOM, $AEP


Losers: $QCOM, $AAPL, $GOOG, $EMC, $GS, $BAC, $AA, $BHI

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