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Compare the first two charts below of the defensive sectors–consumer staples and utilities, versus the consumer discretionary and QQQ charts after. You can see that the defensives are leading us higher here, which may bode reasonably well for short-term stabilization into New Year’s. However, after that I suspect this type of action will not be able to sustain itself, and something has got to give. Sustained uptrends are powered by high growth firms since, at the end of the day, Wall Street loves, craves, and pays for growth most.
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Yes, but it’s a mute point, the Defensive sector charts. If one looks at the trend of these same charts on a weekly basis, one can see that both the XLU and XLP have been on consistent upward trending trajectories since March of 2009. While the QQQ and XLY have stalled for a breather the last several months. Renders the above conclusion, immaterial from this perspective. Just posting another viewpoint to consider.
Don’t see a sustainable uptrend from here with defensives leading. Ive pointed out their weekly bullish charts many times in this blog.
Just to clarify myself. I am trying to convey the fact that the 2 defensive ETF’s have already been on a ‘consistent STEADY upwards’ trajectory for the past 2 years and 9 months. This would imply that just because these 2 defensive sectors are going up now on the daily chart, doesn’t mean that therefore a correction has a probability of occurring in the Tech sector, ie:QQQ sector and the XLY sector.
Yes I got that. Like I said I’ve profiled their uptrends many times before. The issue is that at the beginning of a fresh leg higher in a bull run you often do not see riskier sectors lagging defenses like they are now.
*moot