Blake just identified something critical about yesterday's Fed cut.
The rotation is accelerating faster than most traders realize.
Consumer staples gapped up and stayed up. Healthcare triggered buy signals. Basic materials surged as the top performing sector.
Meanwhile, the Nasdaq barely recovered from its gap down. Tech stocks are sitting at 50% fair price for December. Google dropped 2%.
Blake's thesis is simple. The market isn't chasing AI hope anymore. It's betting on what directly benefits from rate cuts.
Here's what's actually working right now:
- Basic materials as top performer - inflation means their products sell for more while production costs stay flat
- XME broke out - Blake sees it running to $108-$109
- Consumer staples gapped above yesterday's Fed reaction - strength while broader market struggles
- Healthcare buy signal triggered - targeting $155-$160 over next 2-3 weeks
- Dollar General and Walmart setting up - both could add 5% before year end
Then there's Visa. It spiked 6% today for reasons Blake can't justify. The company doesn't benefit from lower rates the way banks do. They only profit from transaction volume, not spread. He's watching for $350 to fade it back to $310.
The December pattern is clear. Every single trading day except one has been at fair price. We're rotating, not breaking out.