Rotation Report: Yellen Claus

Last week was hectic!  Bond yields are going haywire across the globe.  Energy stocks are starting to show signs a bounce is near, while the rest of the market is getting sold aggressively.  Still, a few biotech stocks refuse to go down!

The Fed meets and Yellen will speak this time.  It'll be interesting to see what the Fed says about the global economy.  They've been pretty upfront about conditions worldwide.  There's not a lot of good economic data worldwide to speak of and long term treasuries from the US to Germany to Japan are reflecting that.

Let's start with...you guessed it, Oil.

Crude oil has dipped below the 200 month MA for the first time since the 2009 lows!

Looking at the energy stocks we see they aren't quite as oversold as October AND there is a short term bullish divergence.  This via XLE's McClellan Oscillator

XNG is deep within a major support zone.  Maybe this is one of the energy groups where long term investors will show up first.

Friday, Bakken energy producer OAS had a massive bullish engulfing day with record volume.  It's dropped a cool 80% from the YTD high.  This is by far the clearest daily reversal attempt it's had.  WE could expect more from the group.

Another theme gaining strength on an intermediate time frame is a preference for bond like equities.

Staples are attempting to take out a 14 month peak in relative strength

The S&P dividend index relative to the S&P 500 is breaking out of a ~20 month downtrend.

Real Estate relative to Tech has formed a falling channel over the last year plus.  Notice the MA's starting to curl higher.

Taking a look at the Consumer dashboard we see Apple testing it's relative strength uptrend via the 50 day moving average.  Also note the possible cup with handle in Wal-Mart's RS.

Consumer discretionary has shown great relative strength during this pullback, but buyers earlier in the week have become sellers into the end of the week shown via the shadow tails in the candlesticks

Why is the Hong Kong Index trading so poorly?  I don't understand the Chinese market merger, but this looks precarious at support with the false break above and backtest of the 24K area.

Gosh it sure looks like a huge rounding top in the FTSE at the 2007 high.  A break to fresh highs would negate it, but for now, it looks ugly.

The Euro staged a strong reversal week at trend support connecting the 2009 and 2011 lows.

The drop in US high yield bonds was highly publicized last week, but the action is much worse in the emerging markets!  

If you haven't already, check out my latest two pieces for See It Market: 

Global bond breakdown

Stock/bond ratios key into 2015 (they're rolling over since I wrote it)

To quickly summarize the action of numerous leading groups, most had large bearish engulfing weeks while they start to approach numerous rising moving averages such as the 20 day and 50 day.

Thanks for reading!  Happy Holidays!