Rotation Report: Waiting

Greece and China are driving the risk-off nature globally.  Naturally, we want to look to take advantage of the opportunities the market gives us.  Looking around at my favorite investment ideas, some are reaching buy areas like the 10 week moving average.  Overall, it just seems like the market is just starting to unwind and needs time after large breakdowns across various groups.  We'll get into that later.

At the same time, MACRO trades are starting to work well and that seems to be an emerging theme for Q3.  The economically sensitive groups continue to trade very poorly.  This is a big concern regardless of Greece, China, Puerto Rico or whatever.

Be sure to check out my latest link-fest over at See It Market

Market Backdrop

The VIX broke a key pivot area and held above it at the end of the week.

The Stock Only Advance-Decline line is starting to bounce off a level that has led to bottoms before.  That said, the bounce has been weak.

Looking at the NYSE Dashboard we see volume continuing to deteriorate meaningfully.

U.S. Group Action

Is this a head and shoulders top in the bank index?

Note the trend from 2009 has just broken down in the Financials ETF 

Consumer Staples is an area that could be great for shorting.  Particularly the beverages space.  Brewers gave up critical support last week.

Industrials have broken a 7-8 month wedge lower while losing the 40 week moving average.  Note there is still thick horizontal support down to about 53.

Since the M&A climax top in May. it's been a trend of weakness in Semiconductors.  That continues with a weak bounce off the 200 day moving average.  

Materials broke down out of it's symmetrical triangle.  Normally, we'd bet on a trend continuation(higher).  Clearly that's not the case and worth noting.  The group has a ways to meet the measure move in the 46s.

Other Markets:

Gold relative to the S&P 500 has traded in a tight range for some time.  Is a big move coming soon?

Brent Oil continues work lower after falling out of the rising channel.  

Now WTI has joined it breaking down out of a double top.  I touched on that and the energy group mid-week.  Basically, it's not looking good at all.

The Shanghai Composite is now 30% off the highs and testing a key pivot level into next week.

Brazil's momentum is improving.  Are positive things brewing in South America?

Thanks for reading!  Hopefully you're having a great Fourth of July Weekend!  God Bless the U.S.A!