Sector Rotation

In white are the stronger sectors in rotation, in red the weaker sectors (click on hart for expanded view).

As is obvious by the NASDAQ's performance today, Tech came roaring back into rotation on the open (2nd from the top/dark blue). Energy (pea green) also is putting in a strong showing and finally financials (bottom/green) are still in rotation. These are the 3 important sectors to move the market, Industrials (Dark Purple) are falling apart badly, hence the underperformance of the Dow. Other sectors are on the decline, including: Utilities (which is a safe haven trade and I wouldn't expect it to perform well when Tech, Energy and Financials are in rotation), Healthcare , Staples, Basic Materials, Industrials, and Discretionary is about stationary.

Lets look at the Industry groups in rotation (this is only the very short term view).

 XLE-Energy is struggling, rising into a negative divergence, I don't expect it will hang in there much longer.

 XLE on a 1 mn chart, also showing some trouble. It still has the potential for further gains, but it's uphill right now.

 Remember earlier in the week I sad Financials were coming in to rotation? Here's the positive divergence, they are still pretty strong short term, the S&P should see some benefit from this.

 And Tech, there was some earlier weakness this week, that's about the time Financials came in to rotation. There are some signs of trouble starting on the 5 min chart, but nothng too serous yet, the Q's should be able to head higher.

Tech confirmation and some recent trouble.

All in all, I think these sectors are in rotation to move the market through the resistance zones I've mentioned, only the Dow should struggle because of weakness in Industrials and Energy possibly reversing soon.

The bear flag on the intraday Dow chart that I showed you earlier, has broken to the downside, which will pull in short sellers, if the bear flag can now be shaken out, the short covering should be enough to move the Dow through its resistance zone.