As the days pass … there is less and less that I like about the long side in the Stock Market.
Energy as a sector has been decimated. The Industrials and Materials are not far behind. Technology is flat at best. The entire commodity space looks like the after-effects of a chemical explosion in Tianjin. The ‘safe play’ of utilities has been beaten up to the tune of 4% in anticipation of a rise in rates that may, or may not come. The banks seem to be up a bit. But who wants to buy a bank? And few other sectors seem to have any life left in them. It seems there are fewer and fewer sectors to hide out in.
Selling price action of the last 20 days hasn’t been negated by a large ‘buy’ candle. We’ve been flat all year. Our momentum studies seem to indicate selling inside this price channel. And we’re approaching two of the worst months for stocks, seasonally speaking.
I said this a few days ago, but this is what it looks like before a correction. I remain defensive, and fully believe this remains a ‘raise cash’ market.