Indices continuing to gain ground into mid-day, with S&P stretching higher by 0.50% while both Transports and Small caps show outperformance- To some extent, today is more defensively led than prior with Utilities and Telecomm showing the most outperformance while Energy and Industrials are down on the day- WTI Crude has turned back lower and broken down UNDER MAY Lows, while Energy is breaking down relatively vs the SPX when looking at OIH v SPX charts. This suggests even further Energy Underperformance and OIH should lead to the downside in this regard. For longs, Utilities have shown evidence of turning back up in the near-term and this sector along with Healthcare can be overweighted into early next week for outperformance- Overall, LONG USD should work for the next 3-5 days, and/or shorting EURUSD, while Treasury yields should begin to turn back down with greater velocity and TLT can be bought, along with TMF, TYD, while TBT looks to weaken, as 10yr yield likely moves down to near 1.45- Bottom line, while sector rotation is starting to take on a more defensive bent, and Treasuries have shown some evidence of turning back higher, the actual move lower in equities is still a bit early to bet on ahead of next week and the recent consolidation type triangle at work in S&P looks likely to lead to one final push to new highs up to 2180-5 area for S&P FUTURES and near 2187-8 for SPX cash- I'll send out an email with a few buy ideas and short ideas.. let me know if you have questions
Rally should be close to reaching conclusion, but for now, still looks likely to test upside of this consolidation and make a minor breakout to 2183-5 in S&P futures- For now, no evidence of this turning down in a fashion that would warrant playing for the downside
Crude finally showing some evidence of breaking down under May lows & larger uptrend, and the Energy sector is showing a similar breakdown. This was already the worst performing sector this past month, but should continue underperforming.
For a list of longs and shorts to consider, please subscribe at http://newtonadvisor.com/retail as these long/short ideas will be given out to subscribers only. Have a nice weekend