Crude Runs Up, Stocks Stuck in the Mud

Large-Cap stocks are stuck in a tight range with most of the major indexes finishing mixed. Tech heavy NASDAQ ($QQQ) and S&P 500 ETF ($SPY) finished the day just ever so slightly in the green. Taking a look at the action in various sectors there is weakness in Industrials ($XLI), Materials ($XLB), Consumer Staples ($XLP), and Utilities ($XLU).

I will keep a close eye on these sectors for two reasons; first, yield hogs could be getting ready for bonds to start to sell off, potentially popping yields. Second, this could be the beginning of a sector rotation.

Let’s look at Consumer Discretionary sector ($XLY). This sector had a small gain yesterday and continues to hold up well, setting at a new 52-week high with a lot of momentum to the upside.

Retail ($XRT) and Internet ($FDN) continue to lead the consumer sector higher. What is notable from this group is that Facebook ($FB) has rallied to a new high. I like the move in the Banks ($XLF), especially the Regional Banks ($KRE) which gained over 1 percent and hit another new high. This move in the Banks could be another flag that bond yields are getting ready to pop again.

Finally, Oil & Gas Equip & Services ($XES) got an oversold bounce as Oil ($USO) moved to challenge the upside. We need to see further upside, $20.80 on $USO, before we can say that they have reversed their short-term down trend.

Have a great trading day.