__________________
Earlier this evening, I raised the notion that the capital which has left the energy/material complex could easily land in the retail/consumer discretionary space. From an economic standpoint, this would make sense, seeing as lower commodity prices equals cheaper input costs for firms.
As a trader, however, Mr. Market is not going to reward you for the “A” you earned back in Econ 101 as a freshman in college. In a similar vein, he will also not reward you, and probably punish you harshly, for always trying to make the big superstar technical analysis call, placing your ego above your portfolio balance. Instead, we simply look to see whether capital is actually rotating over, while respecting price triggers, position sizing, and stop-losses.
If that does not sound exciting enough for you, then you will always find yourself a lost trader, wandering the desert chasing every mirage that apparently crosses your eyes.
In order to be better ascertain whether capital is actually rotating over, I have examined a slew of charts on their respective weekly timeframes. The five charts that I present below are good examples of retail/consumer discretionary plays that stand to benefit from a rotation of capital. See my analysis and price triggers on those annotated charts.
Sound advice. Thanks Chess.
Thanks, sir.
chess: why do you necessarily want a secondary break on PEET?
To show that it can clear the resistance over the past few weeks, making the trade a higher probability one, as opposed to further consolidation.
“Lewis, we’ve had Presidents who were beloved who couldn’t find a coherent sentence with two hands and a flashlight. People don’t drink the sand ’cause they’re thirsty. They drink the sand ’cause they don’t know the difference.”
Nice!
Great post sensei.
Thanks, Yogi!
“When you look at Japan, they’ll sell more adult diapers than kids diapers by 2013.” – Kyle Bass, on why he’s betting against Japan
What do you think about beaten down small cap bank stocks, esp. those with low exposure to real estate? E.g. CBIN with a PE of 6 and yield 3.7% Thanks
Not bad if you have long-term timeframe.