Hello TheoTrader,
Markets went out at the lows last week, and made sure that we didn’t fall asleep at the wheel over the holiday weekend. What matters now (and what concerns me most) when it comes to stocks is what’s happening at an internal level.
Over the past few weeks, I’ve shared some of these worries, especially regarding the tech sector.
But now, there are other mounting problems in equities you need to be aware of. Check it out…
Flights to Safety Accelerate
If you take a look at these sector leadership rankings across various time intervals, you’ll see that none of these are sectors that outperform in a bull market.
So, where does that leave us?
The Fed is set to start easing, and the yield curve is steepening. Is this a one-way ticket to an economic slowdown?
We’ll see if the Fed’s able to pivot in time. The good news is that liquidity conditions are not deteriorating, so I wouldn’t be surprised to see this market grind sideways and even generally downward in the next couple months.
Until we start seeing sectors like technology or consumer discretionary outperform again, especially at the shorter-term intervals, I doubt any bid is going to be sustained. In fact, as of last week, technology slipped to 7th place out of the 11 sectors in terms of year-to-date performance. That’s not a bullish tape.
I’ll keep you posted on these very key sector developments. In the meantime, hope to see you this week at TheoTrade’s live event!
Talk soon,