Winning is habit. Unfortunately, so is losing - Vince Lombardi

March 29, 2015

Rotation Report: half-assed

It was a half-assed bounce to end the week.  We can speculate about a lot right now, as there is a ton of damage out there and a lot of volume behind the damage.  Price action during the first few days of April will tell us plenty as we enter the six worst months of the trading year.

The focus of this week's report is some groups standing out.  They can provide some huge clues moving forward.  Let's dig in.

I compiled 20 of my favorite reads of the week in See It Market's Top Trading Links.

Is vol rangebound?

The VIX seems to be respecting the 13-17 range on a closing basis.

Vol term structure may also be forming a lower range on the complacent side of things.

Group Action

Home builders have hit a fresh relative strength high.  Can price break-out?  The strength is permeating through the space as well.

 Are home furnishings forming a continuation wedge?  It sure looks like it for now.

The sharp drop in many biotech names has many folks preaching bubble.  Biotech's momentum via RSI thus-far is undamaged as it maintains the 2015 range.  Further damage from here would be a big hint.

Travel stocks are testing the 10 and 20 week moving average confluence.

 Hotels are flashing relative strength.

Software is another group possibly forming a continuation wedge.

Last week I pointed out the transports via XTN.  Their breakout failed in a big way as the index lost 4.6%.  Note the dow transports ETF (IYT) is testing it's 200 day moving average.

aaaand finally Emerging markets have disappointed for years now.  The line's I drew are quite arbitrary.  I'm more interested in watching the 36-42 range.

Thanks for reading, have a great week!

March 26, 2015

Notes for the day

Here's a few thoughts on my mind this AM.  Trade 'em well!
  • Yesterday was important in the sense that sloppy bears weren't punished.  That is something worth watching in the coming days and weeks.
  • Oil is still in the earlier stage of the move.  
  • I'm hopeful to find an attractive pullback entry in GenCorp (GY).
  • This week the trade has been to attack pressure points in the market.  Over-followed ideas that have either run their course, or run far enough for profit taking.  Traders are taking wins off the table and that goes for both sides of the market.
  • If you have stop areas that you haven't honored...what are you really doing?  I'd call it asking for pain.
  • It's never a good time to not follow your trading plan.  This includes selling positions that haven't reached a stop area.

We can't forget...

If you've followed my work for some time you know in 2014 I pointed out major bond market tops.  We can't forget about these as their tunes and what they suggest have not changed.

In ratio's measuring the market's willingness to take risk.

And possibly in the S&P 500 to bonds ratio.


All ideas shown on this blog represent the authors opinion based on the data available.