Just because I happened to be working on the (weekly) chart and find the patterns interesting, I thought I’d pop the chart up here for your review.
While sectors normally correlated with rising long-term yields (e.g. Energy, Industrials and Materials) have logically been stronger than other sectors since the 2022 bear market began, if the play continues to be falling yields some of the sectors that are traditionally anti-yields or yields-neutral can play some catch up.
Biotech is traditionally anti-yields and here is the weekly chart bottoming pattern we’ve been noting for the last few months. It’s right at its neckline now but also has clear resistance around 145. I am going to remain constructive on it as long as the pattern is in shape AND as long as the stock market is still intact to its rally potential.
Semi is more neutral about yields, but as we noted in NFTRH, has been making leadership moves vs. both NDX and more importantly, SPX. Resistance comes into play at 3200.
EM is an oddball because it is really an anti-USD play, which itself benefited from rising yields. That, I suppose, makes it an anti-yields play on this cycle, at least, as yields drop and so does USD. EEM is at resistance now (ref. USD at a support level) but the upper resistance line coincides with the measured target we originally noted in a January 9th update, at 45. A reminder that I sold EEM, but this is fyi for anyone with interest.
