2 Groups to own Technically in a market that’s getting overbought

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Key Takeaways

  • Minor stalling out for Equities coinciding with VIX spike not too concerning; A push back to 4750-65 looks likely into mid-November before any stalling out
  • Two sectors to favor: Homebuilders and Leisure Sports equipment companies . The stocks in these groups look compelling technically and are likely to outperform
  • Breakdown in Treasury yields as yield curve flattens something which merits attention Meanwhile, Natural Gas cracks support & should weaken further into end of year

Minor stalling out in SPX has tested last Friday’s lows, representing the first move to new three-day closing lows in nearly a month. Additionally, the NASDAQ was down Tuesday the most in two weeks. Importantly however, patterns and wave structure have not suffered any damage, and SPX still looks to lead higher up to 4765 area.

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Overall, Tuesday’s decline does little to change the underlying structure. The VIX spiking more than 20% over the last four trading sessions is interesting on this slowdown, but little to no deterioration in Technology, Financials, nor Healthcare means it’s right to stic...

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