‘Tis the Season for Sector Rotation

I do not have to state the obvious, Energy ($XLE) has been the worst performing sector in December. We have seen Materials ($XLB) in the same category as well. There is also a lack of leadership and momentum in Utilities ($XLU), Healthcare ($XLV), and Consumer Staples ($XLP).

These are leadership sectors that need to have one of the other offensive sectors pick up the proverbial slack. The two sectors that are doing just that are Industrial’s ($XLI) and Consumer Discretionary ($XLY).

Industrial’s ($XLI) have been lagging this month’s rebound off the October lows, but as of late, really popping to the upside. If we can see more volume this week on an upside push this sector could see some new leadership.

Finally, we have Consumers really pacing the charge to the upside for this sector. The drop in oil resulted in slashed prices at the pump, acting like a stimulus to the Consumer at the number one time of year when the consumer is out and spending. With $2 gas prices for the short-term the Consumer Discretionary names are in play and a stepping stone into the new year to the upside.

Looking forward to finishing 2014 strong and riding a lot of momentum into the new year. Have a great trading day, and see you next time at the Corner!