I wrote a piece a couple of weeks ago about sector rotation. I threw out the idea that when we do correct, it may be a shallow and probably a very buyable pullback. I addressed the idea that we just might not see that 8-10% correction that everybody thinks. I thought we might see more of a sector rotation, where the same money just sloshes around from sector to sector while finding temporary new homes. Tom Demark telegraphed this brilliantly.
Are stocks going down? You bet. Look at $FCX or $JOY, or some of the oil service stocks like $SLB or $BHI,the latter I got stopped on today. Other stocks like $AAPL, $CMG and $PCLN seem to find new highs on a daily basis. How about coal $KOL and steel $SLX. Getting crushed, really crushed.
There are holes and leaks all over this tape, but guess what? The S&P still managed to tag the 1419 level yesterday and the Nazzy continues to rip.
The baton seems to get passed from sector to sector on a weekly basis and the indices hold firm. Sectors like technology and banks have picked up the slack.
We should pull back soon, if not, we may just rotate our way to 1500. Nothing surprises me anymore.