StrategasTechnicalAnalysis–PleaseDoNotRedistribute
TechnicalStrategy&Analysis
December,2014
ChrisVerrone,CMTManagingDirector
HeadofTechnicalAnalysisStrategasResearchPartners
(212)906‐[email protected]
ToddSohn,CMTAssociate
TechnicalAnalystStrategasResearchPartners
(646)292‐[email protected]
StrategasTechnicalTeam
2StrategasTechnicalAnalysis–PleaseDoNotRedistribute
62%
55%
66%
69%
57%
52%54%
55%
45%
60%
66%
77%
40%
45%
50%
55%
60%
65%
70%
75%
80%
JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC.
S&P500‐%ofPositiveMonthlyReturns1950toPresent
BEST STRETCH OF THE CALENDAR
3StrategasTechnicalAnalysis–PleaseDoNotRedistribute
99.5
100.0
100.5
101.0
101.5
102.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22DecemberTradingDays
S&P500HistoricalDecember PerformanceSince1950
DECEMBER STRENGTH OFTEN LATER IN THE MONTH
4StrategasTechnicalAnalysis–PleaseDoNotRedistribute
1.4%
1.9%
3.5%
3.3%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
November December
S&P500PerformanceinNovember&December(DataSince1990)
OVERBOUGHT IN NOVEMBER / DECEMBER NOT USEFUL SIGNAL
NovemberPerformanceWhenMoreThan80%ofS&P500isAbove50‐DayMA
NovemberPerformanceSince1990
DecemberPerformanceSince1990
DecemberPerformanceWhenMoreThan80%ofS&P500isAbove50‐DayMA
5StrategasTechnicalAnalysis–PleaseDoNotRedistribute
POTENTIAL FOR PERFORMANCE CHASING
S&P500vs.HFRXGlobalHedgeFundIndexIndexedto100on12/31/13
S&P500
HedgeFundIndex
6StrategasTechnicalAnalysis–PleaseDoNotRedistribute
NEW HIGH DATA HAS EXPANDED
S&P50050&200‐DayMA
%ofS&P500at20‐DayHigh
Ex.Energy,thisdatahasbeenprettysolidacrosstheboard.
7StrategasTechnicalAnalysis–PleaseDoNotRedistribute
1983/84/85 IS AN INTERESTING COMPARISON
1983wasagoodyear...Themarketbrokeoutofa15‐year
rangeandthenewhighdataexpandedsharply(bullish).
1984wasa bigconsolidation...TheS&Pwasup1%buttheRussell
2000wasdown‐10%.Thenewhighdatawasalsoanemic.
1985wasastrongyear...Afteralongdigestiveperiodin1984,stocksresumedhigherin
1985asthenewhighdataexpanded.
S&P500(TopPanel)#ofNYSEStocksat52‐WeekHigh(BottomPanel)
8StrategasTechnicalAnalysis–PleaseDoNotRedistribute
S&P TREND MODEL REMAINS POSITIVE
S&P500
StrategasProprietaryTrendModel
OurS&Ptrendmodelhasbeenpositivefor
36consecutivemonths.
9StrategasTechnicalAnalysis–PleaseDoNotRedistribute
72%
64%63%
51%
42%
39%37%
20%
30%
40%
50%
60%
70%
80%
Nasdaq100 S&P500 S&P100 S&PMid‐Cap Russell2000 Nasdaq RussellMicro‐Cap
%ofStocksinanUptrend
PREFER LARGE-CAP TRENDS
10StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
WEAKM
OMENTU
MST
RONG
WEAKTRENDSTRONG
STRATEGASTECHNICALSECTORMATRIXDecember2nd,2014
0
20
40
60
80
100
0 20 40 60 80 100
WEAKM
OMENTU
MST
RONG
WEAKTRENDSTRONG
STRATEGASTECHNICALSECTORMATRIXDecember8th,2014
SECTOR MATRIX IN DECENT SHAPE, ENERGY WEAKEST *Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
Utilities
Telecom
ConsumerDiscretionary ConsumerStaples
Financials
Energy
IndustrialsMaterials
Technology
Healthcare
11StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
WEAKM
OMENTU
MST
RONG
WEAKTRENDSTRONG
STRATEGASTECHNICALSECTORMATRIXMarch24th,2000
MATRIX LOOKED DIFFERENT IN MARCH 2000
ConsumerDiscretionary
Utilities
Telecom
EnergyTechnology
Financials
Industrials
HealthcareMaterials
ConsumerStaples
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
12StrategasTechnicalAnalysis–PleaseDoNotRedistribute
WILL THIS CHART MATTER NEXT YEAR?
S&P50040‐WeekMA
InvestorsIntelligence Bull/BearRatioBullsstillhandilyoutnumberbears.
VeryBullish
VeryBearish
13StrategasTechnicalAnalysis–PleaseDoNotRedistribute
PUT/CALL DATA IS IN NEUTRAL TERRITORY
S&P50050&200‐DayMA
CBOEPut/CallRatio
10‐DayMA
14StrategasTechnicalAnalysis–PleaseDoNotRedistribute
CREDIT CONDITIONS ARE KEY FOR SMALL-CAP CALL
HighYieldCorporateBondETF(HYG)Relativeto20+TreasuryBondETF(TLT)
Russell200050&200‐DayMA
It’seasiertobebullishonsmall‐capstockswhenHYcreditis
outperforming.
15StrategasTechnicalAnalysis–PleaseDoNotRedistribute
S&P500 Russell2000 S&P500 Russell2000
1984 1.4% ‐9.6% 1985 26.3% 28.0%
1987 2.0% ‐10.8% 1988 12.4% 22.4%
1998 26.7% ‐3.4% 1999 19.5% 19.6%
2007 3.5% ‐2.7% 2008 ‐38.5% ‐34.8%
2011 0.0% ‐5.5% 2012 13.4% 14.6%
S&P500Positive...Russell2000Negative...WhatHappensNext?
SMALL-CAPS LAGGING NOT ALWAYS BEARISH
16StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SMALL-CAPS WERE NOT LEADERS IN THE 1980’s
S&P5001983to1991(LogScale)
Small‐CapsRelativetoLarge‐Caps1983to1991(LogScale)
12/31/1982to12/31/1990
S&P500,+135%Russell2000,+49%
17StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SMALL-CAPS WERE NOT LEADERS HERE EITHER
S&P5001994to2000(LogScale)
Small‐CapsRelativetoLarge‐Caps1994to2000(LogScale)
12/31/1993to12/31/1999
S&P500,+215%Russell2000,+95%
18StrategasTechnicalAnalysis–PleaseDoNotRedistribute
OIL DECLINE IS A TAILWIND
S&P50050&200‐DayMA
WTICrudeOil–65‐DayRateofChange
WTIisdownroughly‐30%overthelast65‐days.
19StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ECONOMIC BREAKOUT #1 (CONSUMER CONFIDENCE)
S&P50050&200‐DayMA
ConsumerSentiment(U‐Mich)
7‐yearhighforConsumerConfidence.
20StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ECONOMIC BREAKOUT #2 (CONFIDENT ENOUGH TO QUIT)
S&P50050&200‐DayMA
JobQuitsas%ofTotalEmployment(JOLTS)
21StrategasTechnicalAnalysis–PleaseDoNotRedistribute
3.3%
5.8%
4.2%
3.9%
7.2%
5.1%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
S&P500&ConsumerDiscretionaryForward6‐MonthPerformanceWhen...
OIL DECLINE OFTEN BULLISH FOR CONSUMER STOCKS
...Trailing6‐Month%ChangeofWTIOilisPositive.
...Trailing6‐Month%ChangeofWTIOilisNegative.
S&P500
ConsumerDiscretionary
S&P500
ConsumerDiscretionary
S&P500
ConsumerDiscretionary
...Historical6‐MonthAveragePerformanceSince1990
22StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SEMIS CONTINUE TO EXHIBIT MOMENTUM
U.S.SemiconductorIndex(SOX)50&200‐DayMA
SOXRelativetoS&P50050&200‐DayMA
23StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BIOTECH HASN’T FLINCHED EITHER
S&PBiotechnologyIndex50&200‐DayMA
BiotechRelativetoS&P50050&200‐DayMA
TheCubistdealhelpedperformance
yesterday,butbroadly,Biotech
remainsleadership.
24StrategasTechnicalAnalysis–PleaseDoNotRedistribute
RELATIVE IMPROVEMENT FOR FINANCIALS CONTINUES
S&PFinancialsSector50&200‐DayMA
FinancialsRelativetoS&P50050&200‐DayMA Startingtoexhibitsome
leadership.
25StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BANKS VS. GOLD REMAINS SUPPORTIVE
S&P50050&200‐DayMA
U.S.BankIndexRelativetoGold50&200‐DayMA
We’vealwayslookedtothis
relationshipasadecentbarometerofriskappetite.
26StrategasTechnicalAnalysis–PleaseDoNotRedistribute
R²=0.86
‐30%
‐20%
‐10%
0%
10%
20%
30%
‐25% ‐20% ‐15% ‐10% ‐5% 0% 5% 10% 15% 20% 25%
IndustrialsQ
/Q%Change
S&P500Q/Q%Change
IndustrialSectorReturnsvs.S&P500ReturnsSince1989
INDUSTRIALS 0.86CONSUMERDISCRETIONARY 0.82FINANCIALS 0.73TECHNOLOGY 0.68MATERIALS 0.54HEALTHCARE 0.44CONSUMERSTAPLES 0.42TELECOM 0.40ENERGY 0.38UTILITIES 0.26
SectorR2toS&P500Since1989
INDUSTRIALS ARE IMPORTANT FOR THE MARKET CALL
27StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SPREADS CONTINUE TO CREEP WIDER
BaaCorporateSpreadsvs.S&PHighQualityIndexRelativetoS&PLowQualityIndex
HighQualitystockshavecontinuedtooutperformwithspreadscreeping
wider.
28StrategasTechnicalAnalysis–PleaseDoNotRedistribute
6.2% 6.0%5.6%
5.0%4.4%
3.0% 3.0%
2.0% 1.9%
‐7.7%
‐10.0%
‐8.0%
‐6.0%
‐4.0%
‐2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Utilities HealthCare Financials Staples Telecom Discretionary Technology Materials Industrials Energy
BloombergHighYieldSectorPerformance2014YeartoDate
HIGH YIELD PERFORMANCE YTD
29StrategasTechnicalAnalysis–PleaseDoNotRedistribute
10’s CONTINUE TO STRUGGLE AT RESISTANCE
U.S.10‐YearYield50&200‐DayMA
Below2.69,thedowntrendinyieldsremains
intact.
30StrategasTechnicalAnalysis–PleaseDoNotRedistribute
FLATTENER TYPICALLY OK FOR STOCKS, INVERSION A PROBLEM
S&P500–LogScale
U.S.2/10YieldCurve
Invertedcurvesarethedealbreaker,stillalongwayfromthat.
31StrategasTechnicalAnalysis–PleaseDoNotRedistribute
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
'38 '41 '44 '47 '50 '53 '56 '59 '62 '65 '68
U.S.Long‐TermBondYield1938to1968
BOND CYCLES CAN TAKE A LONG TIME
TheFedliftedthecaponratesin1951,butitstilltookroughly15yearsbeforeyieldssaw5.00%.
32StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
9
13
2021
9
45
2
0
5
10
15
20
25
<2.50 2.50‐2.75 2.75‐3.00 3.00‐3.25 3.25‐3.50 3.50‐3.75 3.75‐4.00 4.00‐4.25 >4.25
#ofForecasts
10‐YearYieldForecast
U.S.10‐YearYieldForecastsAmongWallStreetEconomistsYear‐End2015,83Forecasts
CENTRAL TENDENCY STILL > 3.00% FOR 2015 YIELD FORECASTS
33StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ANOTHER GOOD WEEK FOR JAPAN
JapanTOPIXIndex40‐WeekMA
WeeklyMomentumIndicatorAccelerating.
34StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BULLISH SETUPS FOR JAPAN GROUPS
TOPIXElectricalAppliances13%ofIndex
TOPIXTransportationEquipment12%ofIndex
TOPIXBanks9%ofIndex
TOPIXMachinery5%ofIndex
TOPIXRetailTrade4%ofIndex
TOPIXInsurance2%ofIndex
TheBanksaretrying...
35StrategasTechnicalAnalysis–PleaseDoNotRedistribute
$ YEN, LONG-TERM
USDJPYMonthly
We’rebuyersofpullbacksfor
USDJPY.
110
124.14
135.15
147.66
160.20
36StrategasTechnicalAnalysis–PleaseDoNotRedistribute
93% OF DAX YIELDS MORE THAN GERMAN 10-YEAR
GermanDAXWeekly
%ofDAXStockswithYield>German10‐YearYield
28outof30DAXCos.haveadividendyield>theGerman10‐yearyield.
37StrategasTechnicalAnalysis–PleaseDoNotRedistribute
IRELAND BREAKING OUT (ANOTHER AIRLINE STORY)
IrishStockExchangeIndex(ISEQ)Weekly
RyanairHoldingsPLC(RYAID)Weekly
Ryanairis18%oftheIrishIndex.
38StrategasTechnicalAnalysis–PleaseDoNotRedistribute
WE REMAIN $ BULLS
EURUSD40‐WeekMA
StrategasOverbought/OversoldIndicator
TheEurochartcontinuestodistribute.Faderallies.
O/B
O/S
39StrategasTechnicalAnalysis–PleaseDoNotRedistribute
USDCAD REMAINS STRONG ALSO
USDCAD50&200‐DayMA
The45‐yearaverageis1.21.
40StrategasTechnicalAnalysis–PleaseDoNotRedistribute
AUSSIE $ BREAKDOWN
AUDUSD50&200‐DayMA
Thetrendremainslowerhere.Faderallies.
41StrategasTechnicalAnalysis–PleaseDoNotRedistribute
U.S. $ STRENGTH IS BROAD-BASED
USDSGD(SingaporeDollar)50&200‐DayMA
BigBase
42StrategasTechnicalAnalysis–PleaseDoNotRedistribute
U.S. $ STRENGTH IS BROAD-BASED
USDTWD(TaiwaneseDollar)50&200‐DayMA
BigBase
43StrategasTechnicalAnalysis–PleaseDoNotRedistribute
THAI BAHT LOOKS NEXT TO GO
USDTHB(ThaiBaht)50&200‐DayMA
44StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ONE RISK TO THE CALL... NO SHORTAGE OF $ BULLS
U.S.DollarIndex(DXY)Weekly
ConsensusInc.%Bullish‐USD
Sentimentissomethingtobemindfulof,butwe’reinthecampthisisastructuralchange
fortheUSD.Pullbacksarebuyable.
45StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SHANGHAI CONTINUES TO IMPROVE... OIL?
ShanghaiComposite50&200‐DayMA
ShanghaiPropertyIndex50&200‐DayMA
BASE
BASE
46StrategasTechnicalAnalysis–PleaseDoNotRedistribute
CONTINUE TO PREFER EMERGING ASIA VS. LAT-AM
MSCIEmergingAsiaRelativetoMSCIEmergingLatinAmerica40‐WeekMA
47StrategasTechnicalAnalysis–PleaseDoNotRedistribute
2.20%
3.44%
6.52%
7.59%
7.63%
8.18%
9.01%
9.32%
17.51%
28.17%
0% 5% 10% 15% 20% 25% 30%
HealthCare
Utilities
Industrials
Materials
Telecommunications
ConsumerStaples
Energy
ConsumerDiscretionary
InformationTechnology
Financials
EmergingMarketsETFSectorWeights(EEM)
THERE’S NOT ENOUGH HEALTHCARE IN THE EEM
EMHealthcaresectorisup23%YTD.
EMEnergysectorisdown‐19%YTD
48StrategasTechnicalAnalysis–PleaseDoNotRedistribute
IS OIL SENTIMENT STILL TOO BULLISH?
WTICrudeOil50&200‐DayMA
CFTCLargeSpeculators,NetPosition
Faderalliesbacktoresistance.
49StrategasTechnicalAnalysis–PleaseDoNotRedistribute
58%58%
54%
52%51%
46%45%
41%
37%
34%
30%
35%
40%
45%
50%
55%
60%
Healthcare Energy Technology Industrials Discretionary Financials Materials Staples Telecom Utilities
Analyst"Buy"Recommendationsas%ofTotalRecommendationsS&P500Sectors
THE SELL-SIDE HAS NOT CAPITULATED ON ENERGY STOCKS
TheEnergysectorisstillnearthetopofthislist.
The2ndbestsectorYTD.
50StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ENERGY WEAKNESS CONTINUES TO WEIGH ON BRAZIL
BrazilBOVESPAIndex50&200‐DayMA
BOVESPARelativetoS&P50050&200‐DayMA
51StrategasTechnicalAnalysis–PleaseDoNotRedistribute
KEEP AN EYE ON LAT-AM CDS
5‐YearSovereignCDSColombia,Peru,Mexico
Colombia
Mexico
Peru
52StrategasTechnicalAnalysis–PleaseDoNotRedistribute
FADE COMMODITY RALLIES
ContinuousCommodityIndex(CCIIndex)LogScale
EquallyWeightedIndex(5.88%WeightingforEachCommodity)
WTIOil
HeatingOilNaturalGas
CornWheat
SoyBeansLiveCattleLeanHogsSugarCottonCoffeeCocoa
OrangeJuiceGoldSilver
PlatinumCopper
Itdoesn’ttakeatechniciantosee
theproblemhere...
Fadestrength.Resistanceisnow
500‐515.
53StrategasTechnicalAnalysis–PleaseDoNotRedistribute
FCX CONFIRMING COPPER WEAKNESS
FreeportMcMoRanvs.Copper
Copper
FCX
54StrategasTechnicalAnalysis–PleaseDoNotRedistribute
REAL RETURNS... EQUITIES VS. COMMODITIES
S&P50050&200‐DayMA
S&P500RelativeCRBCommodityIndex50&200‐DayMA
RealBullMarket
Stocksgoup,andtheyoutperformcommodities.
NominalBullMarket
Stocksgoup,buttheyunderperformcommodities.
55StrategasTechnicalAnalysis–PleaseDoNotRedistribute
CONTINUE TO LIKE HEALTHCARE
S&PHealthcareSector50&200‐DayMA
HealthcareSectorRelativetoS&P50050&200‐DayMA
56StrategasTechnicalAnalysis–PleaseDoNotRedistribute
HEALTHCARE 52-WEEK HIGHS ARE ROBUST
S&PHealthcareSector50&200‐DayMA
49%
Expansionsinnewhighsarerarelybearish.
%ofHealthcareSectorat52‐WeekHigh
57StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
Weak
MOM
ENTU
MStrong
Weak TREND Strong
HealthcareIndustryGroupMatrixDecember8th,2014
HEALTHCARE TRENDS ARE FIRM
Equipment&Supplies
Pharmaceuticals
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
LifeSciences
Biotechnology Providers&Services
Technology
58StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BIG BASE IN HEALTHCARE
59StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BIG HEALTHCARE BASE
60StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
Weak
MOM
ENTU
MStrong
Weak TREND Strong
TechnologyIndustryGroupMatrixDecember8th,2014
TECHNOLOGY IS MIXED BAG
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
Semi&SemiEquipment
Software
InternetSoftware&Services
Computers&Peripherals
CommunicationsEquipment
ITServices
ElectronicsEquipment
61StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SEMI NEW HIGHS EXPANDING
SemiconductorIndex(SOX)50&200‐DayMA
%OfSemiconductor&Semi‐EquipmentStocksat65‐DayHigh(54Issues)
Reluctanttogettoobearishwithnewhighsexpanding.
62StrategasTechnicalAnalysis–PleaseDoNotRedistribute
DECISIVE BREAKOUT
63StrategasTechnicalAnalysis–PleaseDoNotRedistribute
APPLE NOT AS EXPENSIVE AS IT WAS IN 2012
Apple(AAPL)40‐WeekMA
AppleMarket‐Capas%ofS&PMarket‐Cap
3.8%
5.0%
64StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BIG BASES IN TECHNOLOGY
65StrategasTechnicalAnalysis–PleaseDoNotRedistribute
TECHNOLOGY LAGGARD
66StrategasTechnicalAnalysis–PleaseDoNotRedistribute
TECHNOLOGY LAGGARD
67StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
Weak
MOM
ENTU
MStrong
Weak TREND Strong
FinancialsIndustryGroupMatrixDecember8th,2014
CAPITAL MARKETS IMPROVING
REITs
Thrifts&Mortgages
Div.FinancialServices
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
CapitalMarketsInsurance
ConsumerFinance
CommercialsBanks
RealEstateManagement&Development
68StrategasTechnicalAnalysis–PleaseDoNotRedistribute
NEW HIGH DATA EXPANDING FOR FINANCIALS SECTOR
S&PFinancialsSector50&200‐DayMA
%ofFinancialsSectorat65‐DayHigh
45%
Bestreadingsincemid‐2013.
69StrategasTechnicalAnalysis–PleaseDoNotRedistribute
I-BANKS & BROKERS CONTINUE TO LOOK GOOD
70StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BIG-CAP BANKS IMPROVING
71StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BULLISH SETUP FOR ASSET MANAGERS
72StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BULLISH SETUP IN FINANCIALS
73StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
Weak
MOM
ENTU
MStrong
Weak TREND Strong
ConsumerDiscretionaryIndustryGroupMatrixDecember8th,2014
FAVOR HOTELS & RESTAURANTS WITH LOWER OIL
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themore stocksoutperforming).
HouseholdDurablesDiversifiedConsumerServices
Distributors
InternetRetail
SpecialtyRetail
MultilineRetail
Hotels&RestaurantsLuxuryGoods
LeisureProducts
AutoComponents
Media
Autos
74StrategasTechnicalAnalysis–PleaseDoNotRedistribute
98
99
100
101
102
103
104
105
106
1 4 7 10 13 16 19 22 2 5 8 11 14 17 20 2 5 8 11 14 17 20 1 4 7 10 13 16 19 1 4 7 10 13 16 19 3 6 9 12 15 18
HistoricalS&P500RetailIndexRelative S&P500SeasonalPatternOctoberThroughMarch‐ Since1989
THE RETAIL SEASONAL
October November December January February March
Historically,RetailstockstendtooutperforminNovember,stallinDecemberandJanuary,andthenresumehigherinFebruaryandMarch.
75StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ONE OF THE WEAKER CONSUMER CHARTS
76StrategasTechnicalAnalysis–PleaseDoNotRedistribute
3-MONTH LOW FOR TESLA... OIL?
77StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ENERGY VERY OVERSOLD...
S&PEnergySector50&200‐DayMA
%ofS&PEnergySectorinanUptrend
ByalmostanyindicatorEnergy
stocksareoversold,butwedon’tthinkyougetmuchmorethanatactical
bounce.
78StrategasTechnicalAnalysis–PleaseDoNotRedistribute
...BUT ENERGY CREDIT REMAINS WEAK
S&PEnergySector50&200‐DayMA
HighYieldEnergySectorCDS
InvestmentGradeEnergySectorCDS
BothIGandHYEnergyCDScontinuetoshoothigher.
79StrategasTechnicalAnalysis–PleaseDoNotRedistribute
ENERGY SECTOR BOTTOMED AT 5% OF S&P MARKET-CAP IN 1999
S&P500EnergySector40‐WeekMA
EnergySectorMarket‐Capas%ofS&P500Market‐Cap
80StrategasTechnicalAnalysis–PleaseDoNotRedistribute
0
20
40
60
80
100
0 20 40 60 80 100
Weak
MOM
ENTU
MStrong
Weak TREND Strong
IndustrialsIndustryGroupMatrixDecember8th,2014
AIRLINES ARE LEADERSHIP
*Thesizeofeachdatapointisproportionaltoeachsector’srelativestrength(i.e.,thebiggerthedot,themorestocksoutperforming).
Conglomerates
Aerospace&Defense
Road&Rail
AirFreight
Machinery
ProfessionalServices
CommercialSvc.&Supplies
BuildingProducts
Elec.Equipment
Con.&Engineering
TradingComp.
Airlines
81StrategasTechnicalAnalysis–PleaseDoNotRedistribute
SOME PERSPECTIVE
NYSEAirlineIndex
Don’tfearstrengthwhenthechartlookslikethis.
MassiveBase
82StrategasTechnicalAnalysis–PleaseDoNotRedistribute
BASE BREAKOUT