This post was originally published on this site.
00:00 Speaker A
Well, let’s call it rotation and not retreat because I’m going to show you the action in some of the majors here and you’re going to take a look at the Dow. That was down 41 points. That’s just about break even right there. S&P 500 down a little bit more, 16100 of 1%, 16 basis point, not a lot. And then the Nasdaq composite, all right, that’s that’s not nothing, down 60 of 1%. Mainly tech though. We call it the tech heavy Nasdaq for a reason. But here’s what I’m looking at. The S&P 500
00:24 Speaker A
equal weighted index. That’s where every stock gets one vote. And although it’s not a huge gain, it’s still positive and the uh the equal weight has been outperforming recently. Just take a look at the last month. uh up about 3%, not gangbusters, but for all the arguments and worries about concentration, that is kind kind of a counterpoint when you’ve got that reaching record highs recently. Here’s the sector action today. want to show you the year to date. Uh tech is still number one. Communication service is
00:49 Speaker A
number two. That’s where you have Meta and Alphabet. Then you got industrials. So uh kind of a cyclical growth heavy trade right there. But here’s what happened this quarter. As I’ve been pointing out, healthcare XLV by far and away the best performing sector. that’s up 12% and then financials also outperforming just barely the S&P 500, but it’s only up about 2%. But the point is is that we have seen rotation take hold here and we’ve seen it in the leadership too. This is my my sentiment indicator
01:19 Speaker A
full of ETFs and right at the top there, the top two are actually biotech. and we got Korean stocks, which is chip heavy, then we have the Philly chip index. So that is actual chips. Then we got value though right next to chip stocks, value, uh solar, micro caps, regional banks, transportation, quantum, small oil, small stocks, that would be small caps. Uh the list goes on. So, my point is, although we’ve seen some things fall out of favor on a day-to-day basis, the bull market remains
01:45 Speaker A
alive and well.
01:47 Speaker B
Some markets moving lower that I know we’re on your radar.
01:50 Speaker A
Yes. Let’s check that out. We got small caps. So I was just talking about them. They uh they might be in for a little bit of a rug pull. So notwithstanding everything I just said, I want to show you the price action in the Russell 2000. And I only highlight this here and it’s only been a couple days since we had a record high, but um let me show you the year to date with some candlesticks and here, well, I’m going to put the line chart because those are hard to see. We just barely broke to record
02:15 Speaker A
highs. And one thing small caps have done over the last four or five years is they have broken to new highs and then just immediately sunk back down. In fact, that’s uh one of Bitcoin’s favorite ploys as well. So, I’m just wondering, we haven’t crossed the Rubicon just yet, but we might be setting up for something a little bit farther down below 2,500. I think that suggests that we might be in for another little rug pull there. Here is a five-year and just to highlight what I’ve said
02:39 Speaker A
before, uh here’s the record high that we had in 2021. Then we exceeded it just ever so slightly and then we came down, crash and uh spoiled all those hopes that we were going to go straight up and are we in for a repeat? Well, only history is going to tell.
02:54 Speaker B
Uh, you know, we haven’t talked in a while. Yes. Black gold, crude.
02:59 Speaker A
Yes, let’s do that. Because I’ve got a clever header for that and then we can actually find the chart. Energy stocks doing better. Are they greater than crude oil? So, here’s the thesis. Crude oil today just settled at the lowest point in, I believe four years. You have to go back to February of 2021. And let me there’s a five-year chart right there. And you can see here’s that uh invasion of Ukraine by Russia back in 2022, 130 barrels, $130 per barrel intraday. We’re looking at a
03:30 Speaker A
fraction of that, 56, 65 right now. But despite the fact that crude oil is down about 20% this year, I’m going to show you what’s happened with energy. Uh energy, let’s get the year to date on that. I think it’s up about 5%. There you go. But as you can see this here, it’s just been trading sideways. and in fact over the last five years, most of this is been trading sideways. So if you take a look at the max chart, this goes back to the beginning of the century, we’ve been here before.
03:57 Speaker A
Energy, this is XLE, large cap energy, first uh plumb these heights in what, 2008 or so, and then we had it again in the mid- teens. And now what’s different here, what I like about this setup is that we are flagging. We didn’t just hit this hit a higher point and then immediately drop like these other two times. We are flagging right now. So I think if crude oil can get started next year and there’s a lot of support for commodities, especially with the weaker dollar, especially with the
04:18 Speaker A
Fed lowering interest rates, energy might be one of the surprise, the sleeper trades of 2026. That’s my pick.
04:26 Speaker B
Finally, Monday, let’s check let’s check uh crypto.
04:29 Speaker A
Let’s do that real quickly. Another disappointing weekend for crypto. This is going to be the year to date crypto beat Bitcoin down 22%. I’m going to show you the last two month and nothing new here. I’ve been saying that the shorts are in control. If you take this high here, this low here, we sold off from exactly the 50% mark. So the shorts are definitely in control. Still looking for 75,000, haven’t reached that just yet this year, but that’s my wash out point.
04:57 Speaker B
All right, thank you, buddy. Appreciate it.
04:59 Speaker A
You bet.