First, the VIX, which has gotten clobbered on whatever is making the markets feel good today. I added some VIXY back yesterday as a vol. hedge, but obviously did so too soon. Show biz. I am holding it pending the VIX filling its SMA 50 after a gap fill.
SPX is showing something today. Per #627 we had anticipated a bounce to at least the SMA 50 in US indexes, but this is a show of strength. Election day silliness or something real? The bulls are re-taking control (Captain Obvious).
And I find it interesting that Healthcare is leading the way. Whether it’s insurers (e.g. UNH), services (e.g. CVS), medical devices or biotech, Healthcare seems to think something has happened with the election to put it in good stead going forward.
If I am going to guess my guess would be that H/C thinks Biden and Congress. The reflation stuff (Materials, Banks, etc.), which I interpret as Trump stuff is lagging today as interest rates pull back. Wife just told me that we will not know Wisconsin until December 1st, so I don’t know how or why the market would be projecting Biden, but to me it looks like a Biden-biased market. But I am not a political type so please don’t count on me knowing much of anything actionable.
Banks too are taking the interest rate, reflation pullback today.
Then of course there is Tech, which is up big and maintaining market leadership after having weakened lately.
And the real leader, the Semi index. That’s a completely intact and bullish chart as noted in yesterday’s update.
Looking afield globally, here’s China large caps, which I added yesterday (per the trade log) because I could not stand to look at its bull pattern any longer. The now bullish daily joins bullish longer-term views as well.
And finally, in the land of ignominy reside the gold stocks. The counter-cyclical sector is not allowed to celebrate election day. At least not yet. Having stopped at the SMA 50 the favored pullback areas of 280 and 260 are still in play. Take out the SMA 50 and the October high and then we’ll talk new bull phase. But not until.