Browsing: Greg Guenthner
Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.
The Biotech iShares ETF is up 23% since the Oct. 15th bottom. No, that is not a typo. Biotechs have torched the S&P over the past two months--more than doubling the returns of the big index. And biotechs as a group are up more than 38% year-to-date. In fact, since we first highlighted the June comeback, the Biotech iShares have gone nowhere but up.
It's a theme we've shared with you since April. And it's only gotten worse. The gaming industry has come under all sorts of pressure--a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn't long before those cracks turned into gaping holes you could drive a friggin' truck through. That's where things stand today.
The latest victim of the crude rout is none other than the stalwart tech stocks. These are the go-to trades that have held up all year long. I'm talking about stocks like Google, Yahoo! and Microsoft. Like I said before, these aren't no-name stocks you're seeing drop more than 10% from their highs last month.
There's an entire parade of metals and energy plays running off the side of Commodity Mountain like a herd of lemmings. Gold cracked $1,200 after a $30 drop. Silver cratered more than 5% on the day. Copper fell another 2% Natural gas is down. Heating oil is down. Oh, and our main culprit, oil, coughed up another 4%. And that's just yesterday's losses...
The Emerging Market iShares ETF (NYSE:EEM) is in a tailspin. After showing signs of life over the summer, this emerging markets index is tumbling to nine-month lows. Technician John Murphy notes that while EEM has dropped 11% since the oil plunge began, oil producers Brazil and Russia have lost 25% and 40% respectively since July. And yes, you guessed it--they're also the biggest countries in EEM.
My conservative estimate when all is said and done is a 15% gain on this trade. But if the party really gets loose this holiday season, we could see a nice run-up into January. Without much competition from its "competitors" like Twitter, eager traders might just push this one into the stratosphere.
Ever since the market got off to a rough start early this year, utilities have been the Rock of Gibraltar. Social media stocks tanking? Buy utilities. Retail stocks suck? Buy utilities. That's made utilities one of the best performing major sectors in 2014. In fact, utilities as a group are up nearly 26% year-to-date.
This newfound strength is your signal to grab onto these smaller stocks now before they really begin to blast off into the final weeks of the year. Seasonally, we're in a very strong period for stocks--and comeback plays like this one. It's your best shot at a Santa Claus rally that could put a nice gift under your tree before the year is up...
Make no mistake--one of the biggest trends you will experience over the next five years is the rise of organics. I first told you about it in October. From healthy grocery stores to better fast-food and casual dining options, you'll soon have dozens of higher-quality options.
The Financials Select Sector SPDR (NYSE:XLF) is hitting new year-to-date highs. Banks are starting to outperform the S&P 500 - after getting clobbered earlier this year. And short-term interest rates are finally starting to rise--which is huge for banks that have suffered years of historically low rates.