Sector Rotation in Todays Market
Crude oil futures have rebounded and recently surpassed $54/bbl, after the IEA raised demand forecasts due to cold weather and growing economies in the U.S. and China... Meanwhile, worries about the Fed's measured pace of raising interest-rate have been heightened after imports climbed 1.9% to a record $159.1 bln in January, exceeding exports by $58.3 bln (consensus -$56.8 bln)...
The Jan trade deficit was the second largest reading ever (behind the Nov. 2004 figure) after narrowing to a revised $55.7 bln a month earlier... As a result, yields on the 10-year note have again surged above the psycholigcal 4.5% and the dollar has weakened against both the euro (1.3467) and the yen (103.94)...MSM Money - Breifing.com reported.
Down: Bonds, Dollar, Financial, Utilities, Brokerage, Retail, Biotech, Semis
Up: Interest Rates, Oil, Energy, Materials(steel +6.4%), Transports? Homebuilders?
At least for TODAY, this looks like another sector rotation, the support for semis is off and some profits are being taken, the bond market pummeling continues and extends to emerging markets and high yield junk bonds. Renewed support and a respit for profit taking in the recent pullback sectors, Oil, Energy, Materials and Homebuilders.
Earlier in the week, semis were the conundrum, with a grim 1st half 05 outlook, they should not be going up. The recent dollar sell off, rising interest rates and rising oil; the transports (except oil transports) and homebuilders should be going down, this would seem to be another bear trap being set.
Of note, with the dollar sell off, gold, oil and energy are not going up as much as they should, a possible sign of major market weakness. The mid (MID) small (RUT) caps are showing some support by attempting to tread water, combined with an improved Advance/Decline volume, this may be a sign of a market reversal heading into Monday. However, if the market cannot put together at least 2 up days starting Monday, it is likely that there is a much larger downside to the current trend which would continue at least through next week end.
The Jan trade deficit was the second largest reading ever (behind the Nov. 2004 figure) after narrowing to a revised $55.7 bln a month earlier... As a result, yields on the 10-year note have again surged above the psycholigcal 4.5% and the dollar has weakened against both the euro (1.3467) and the yen (103.94)...MSM Money - Breifing.com reported.
Down: Bonds, Dollar, Financial, Utilities, Brokerage, Retail, Biotech, Semis
Up: Interest Rates, Oil, Energy, Materials(steel +6.4%), Transports? Homebuilders?
At least for TODAY, this looks like another sector rotation, the support for semis is off and some profits are being taken, the bond market pummeling continues and extends to emerging markets and high yield junk bonds. Renewed support and a respit for profit taking in the recent pullback sectors, Oil, Energy, Materials and Homebuilders.
Earlier in the week, semis were the conundrum, with a grim 1st half 05 outlook, they should not be going up. The recent dollar sell off, rising interest rates and rising oil; the transports (except oil transports) and homebuilders should be going down, this would seem to be another bear trap being set.
Of note, with the dollar sell off, gold, oil and energy are not going up as much as they should, a possible sign of major market weakness. The mid (MID) small (RUT) caps are showing some support by attempting to tread water, combined with an improved Advance/Decline volume, this may be a sign of a market reversal heading into Monday. However, if the market cannot put together at least 2 up days starting Monday, it is likely that there is a much larger downside to the current trend which would continue at least through next week end.
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