Hope everyone is having a nice weekend. We all need a rest from the market from time to time. Starting to see some rotations, but it maybe to early to trust the moves.
For example some of the Chines stocks are beginning to sell off, but that could just mean a mild pullback after the nice move they have had, Stocks like QIHI and DANG have pulled in about 10% as well as others. Alibaba I believe is slated for a September IPO, so it would not surprise me at all to maybe see some continued weakness in that space, as institutions and funds get liquid for Alibaba. It happens. We aw FB sell off over 15% before the TWTR ipo so……
Biotech continues to be the clear leader and the IBB maybe historic highs last week. The financials have finally caught a little fire and its nice to see them back in play a bit. One thing this market has taught us is that we DID NOT need the financials to make highs. They have finally woken up, but the market did just fine without them. The current strength form this group can only be a positive.
Secular bull markets (yes, we are in one) have a tendency to eventually lift all boats. Sectors or individual stocks that are out of favor have a tendency to eventually find buyers again. Hence my recent additions of USG, CBI and WFM. These are stocks that have been taken to the wood chipper, but could find love again soon. Sometimes being early can be boring especially when you see momentum stocks grab the headlines on a daily basis, but slow and steady can pay the bills too.
I will publish the weekend video later today or tomorrow and I am seeing some fabulous setups.
See you then.
Joe