The number of stocks that act well from a technical perspective has been decreasing over the past several weeks. When the pullback ended in early February many strong names tested support for the first time in several months.
The markets were able to eke out a further week of gains with small cap stocks leading the charge as the Russell 2000 rallied 1.47% for the week while mega cap stocks like the S&P 100 lagged, falling 0.13%. Energy was the top performing sector (+1.78%) while the telecommunications (-0.89%) and financial sector (-0.53%) were the worst performing sectors.
Rotations come and they go, typically lasting between six and nine months. Rotation is to stocks what location is to real estate. You have to be aware that diversified investment managers are always looking at their portfolio weightings to increase their position in sectors and industry groups that are outperforming the market and decreasing their weightings in positions that are underperforming.
That is what one of my old bosses told me once. I think of that comment when we get into tricky markets (when isn’t the market tricky). If looked like things were coming unglued a few weeks back and many were bracing for the next move lower.
Everyone is fully aware that the current equity market cycle has been characterized by lack of expanding volume. Is this why the current environment has been described as the rally no one believes? Or the most hated rally in recent memory?
Throughout the decline I maintained we were merely dealing with a cooling off period in a strong bull market, and the data highlighted below continues to support the notion as the market’s long-term trend and momentum remain in bullish territory.
Lowry Research’s Senior Market Strategist, Richard Dickson, joins Jim Puplava on the Financial Sense Newshour to help answer the question of whether the bull market is over. Richard cites two key metrics, buying power and selling pressure, and says the current stock market is acting opposite of what one would expect if this was a major peak.
Last August, I wrote an article about an intermediate bottom in gold, but that a more meaningful long-term bottom would still take time and price. I explained how important it was to allow long-term moving averages to stop falling, which would take...