Transports, Financials, Smallcap Year End Rally. Energy & Gold Stock Correction Nearly Over?
After the Brexit rally, the market quietly churned, mostly sideways leading into a seasonal correction before the election, not leaving much to talk about until the surprise election result (that Jeffery Gundlach predicted correctly this summer!)
It looks like the seasonal/year end/Santa Claus rally has started with some gasoline from the surprise Trump win.
We are starting to see momentum in new highs and breadth on the Nasdaq, NYA is following right behind but has had heavy rotation that seems to be calming down a little, but should continue through the end of the year as the stampede out of bonds continues.
Financial and Transport stocks have lagged the major market indexes for some time, creating a large divergence, but the market didn't weaken and turn down, leading me to believe we would see rotation into those names. I didn't expect to see them dramatically pop the way they did but it leads me to believe it's not over! The same can be said for smallcap stocks.
SOX is still leading Tech, I expect SOX, NDX & Nasdaq to rally thru the end of the year.
The energy sector has been stuck in neutral since the beginning of summer, but we may see a breakout before the end of the year as money managers scramble for opportunity in beaten down names. I'm still betting on oil services and energy in general except renewable energy which hasn't found a bottom yet.
Gold mining names may be getting close to the end of their correction now that the XAU is around a 50% retracement of the Jan to Aug rally.
Following up trades from my previous 3 posts:
Still waiting on Energy stock sector. (XLE, OIH since May, added FCG in Mid July) still looks like a narrow consolidation, may be in the next stock sector rotation (or I'm reading it wrong!)
RUT etf URTY in beginning of June,
Since it's leveraged I purchased 1/3 position.
SOX etf SOXL in early July 1/3 position
QQQ etf in late May
Added Dow Transports etf IYT mid July
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