A weekly view of some global markets vs. SPY shows Europe holding key support and bouncing a bit, China large caps holding below key resistance but above a key moving average, Canadian stocks far down but bouncing (with an interesting currency dynamic brewing if the CAD tops out), Russia looking best of all and the EM, which had looked best of all, fading now and testing key breakout support.
Let’s switch to the finer-tuned daily view for a look at some US sectors vs. SPY. Financials boosted right in line with a spike in long-term Treasury yields, which was fully expected. Energy is also more positively correlated to yields than not and XLE vs. SPY has made a signature move, unlike anything in 2017. Healthcare (on balance negatively correlated to long-term yields) is testing key support relative to SPY. Industrials and Materials have zoomed vs. SPY, with Materials breaking to new intermediate highs. Technology, a market leader (with all those Apples, Facebooks and Googles in the mix) has been sagging for a while now and yesterday saw its ratio to SPY drop below the SMA 50. Unless that is negated, it’s going to start looking more and more like a double top.
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