econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 06 February 2017

Market And Sector Analysis 05 January 2017

Written by , Clarity Financial

Data Analysis Of The Market and Sectors For Traders


S&P 500 Tear Sheet

The “Tear Sheet" below is a “reference sheet" provide some historical context to markets, sectors, etc. and looking for deviations from historical extremes.

If you have any suggestions or additions you would like to see, send me an email.


Sector Analysis

Comments

With “Week 2" of the new administration behind us, and a flurry of “executive orders" being issued, the markets were saved on Friday by an “order" to effectively repeal the “fiduciary rule" of Dodd-Frank effectively putting the “Wolf Of WallStreet" back in the proverbial “Investor Hen House."

As I tweeted on Friday:

(Please “Retweet" If you agree.)

This order sent financial stocks rocketing higher on Friday which pulled the markets higher into the close and offsetting the drag from AMZN following their earnings announcement.

For the second consecutive week, the S&P Index finished higher with a 0.12% or 2.73 point gain. However, the reversal from early trading low was a total reversal of 30 points for the week.

The Rotation Continues

Over the last couple of months, I have been discussing the coming rotation of the “risk on" versus the “risk off" sectors in the market. As I noted (with a video) at the beginning of the year, these rotations usually are early indicators of a “risk off" transition and provide opportunities for investors.

As you can see, that rotation has continued to accelerate over the last couple of weeks.

This rotation is still likely early in its movement. As noted above, while RISK bullishness has reached extremes, SAFETY has been completely disregarded. Reversions tend to be rapid.

More importantly, from a historical viewpoint, and as I discussed this week, corrections in the month of February tend to amass towards the end of the month.

“A look at daily price movements during the month, on average, reveal the 4th trading day of February through the 12th day provide the best opportunity to rebalance portfolio allocations and reduce overall portfolio risk."

In other words, don’t let this week’s rally fool you. It is historically very well aligned with normal early February advances. The “risk off" trade is likely telling us something important.

From a position view, Technology pushed higher last week along with Staples, Health Care, Utilities, Financials, and Materials. Discretionary and Industrials lagged while Energy broke below its 50-dma.

From the broader index positioning:

Small Caps, REIT’s, Mid Caps, Dividend Stocks and Bonds continue to flirt with their respective 50-dmas. Emerging and International markets got a lift from the weakening dollar which prompted an increase in International weightings in portfolios last week from a trading perspective.

Gold retested its 50-dma and bounced higher which is a technical improvement but remains locked in a long-term downtrend.

The table below shows thoughts on specific actions related to the current market environment.

(These are not recommendations or solicitations to take any action. This is for informational purposes only related to market extremes and contrarian positioning within portfolios. Use at your own risk and peril.)

Portfolio Update:

Eight weeks ago, as suggested, we hedged our long-equity positions with deeply out-of-favor sectors of the market (Bonds, REIT’s, Staples, Utilities) which have continued to perform well in reducing overall portfolio volatility risk.

Early this past week we added two new positions from a “Trading" perspective only: IWM - Russell 2000 and VEA - International

The short-term bullish trend and technical setup required an increase in equity risk in portfolios. However, all positions maintain very tight trailing stops as the mid to longer-term dynamics of the market continue to remain very unfavorable.

As I have been warning over the last couple of months, the stronger dollar and the rise in rates should not be dismissed.

Everything is currently pointing to this being a very late stage advance, so profit taking, hedging, and rebalancing remains strongly advised.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
U.S. Top Source Of DDoS Attacks In Q4 2016
How Artificial Intelligence And The Robotic Revolution Will Change The Workplace Of Tomorrow
Amazon's Alexa Is A Fast Learner
What We Read Today 26 March 2017
NASA's Plan To Use A Giant Magnet To Make Mars Habitable
Mexico Faces Cloudy 2017 Outlook, Recent Data Mixed
Money Market Funds And The New SEC Regulation
Life Cycle Hypothesis
How Tight Is The U.S. Labor Market?
Infographic Of The Day: President Trump's Budget Would Make Big Cuts To Agencies Which Focus On Science
Early Headlines: GW Will Increase Rainfall, New Ohio Law Inhibits Wind Farms, Break Up California?, EU C Emissions At 22-Yr Low, Mosul Offensive Suspended, And More
The Cynical Game
Earnings And Economic Reports: Week Starting 06 June 201627 March 2017
Investing Blog
Earnings: A Lot Less Than Meets The Eye
The Week Ahead: Does The Demise Of The Health Care Bill Mean Anything For Stocks?
Opinion Blog
Fade To Black
Robots, Aliens, Corporate Drones - Who Will Be The Citizens Of The Future?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
24Mar2017 Market Close: Trumpcare Collapses But Little Affect On The Markets
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved