In no particular order:
- The relative out-performance of industrials & health-care vs. almost every other market sector
- The relative out-performance of large caps on Friday (vs. small & mid caps)
- The relative out-performance of low-vol vs. high-beta on Friday (SPLV vs. SPHB)
- The accumulation day on Friday and what that means for the market (short version: as long as Friday's lows hold, I expect a grind upward into year-end. Accumulation/Distribution days act as anchor points.)
- Gold & Silver & related miners
- Bonds & Yields
- Trends in Natgas, Crude, and the Gasoline:Crude spread
The most surprising thing to me that happened this week was the action in energy stocks. Forget IOC blowing up; check out the action in the former energy leaders. For example, on Friday, the INDU's are up 200 pts and many of the former leaders in energy, including: OAS, PXD, EOG, not to mention solar names, were getting hammered. That's the epitome of poor relative strength in the face of rising oil prices and buoyant stock market - a big, giant red flag. The large caps energy names (XOM, CVX) and refiners were holding up the whole sector so the headline prices of the energy index were well-contained, but the action under the surface was ugly. It won't take much for the energy sector to completely rollover. Technical indicators for the broader market suggest to me that the probabilities are for higher prices, but if we do rollover watch for energy to lead on the downside. They also have the potential as a hedge while playing other sectors (like industrials).
Here's a chart:
Here's what I see:
- Poor RSI
- Nested box formation
- Small box is a tight range consolidation
- The bottom of the large box is the target on a break of the small box
For more charts and to read a disclaimer, please visit my public chart list on stockcharts.com....
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