Lagging Sectors Begin to Break Out

Aside for the truly defensive sectors (i.e. utilities) this 2 month rally has seen a rotation into almost every “growthy” subsector – except for 3 that I can think of: solar, dry bulk shippers, and oil services. The latter group is still struggling but the former two have seen the rotation finally come to their doorsteps. Which is sensible since we’ve time warped back to 2007 and dry bulk shippers and solar stocks were all the rage back then.

Claymore/MAC Global Solar Index (ETF) (TAN)

DryShips Inc. (DRYS)

Now the question to be asked is… after every “growthy” sector has had its turn in the sun (pun intended) what’s next? In the old days when the last vestiges and / or the most speculative of stocks and sectors start running (both happening of late) one would want to get very cautious and wary and begin planning for a selloff. But that was the old market when the index could fall more than 0.3% – I don’t know the rules in this market.

With the “no one loses” American economy & stock market, I guess we wait for the rotation to return to the first sectors that led us up and start a new leg of rallying…… and from there we keep rinsing, washing, repeating – until S&P 2500?*

* I’m joking… right?

Poor TZA, your 50% loss in 2 months saddens me….one day we will be reunited.

Direxion Daily Small Cp Bear 3X Shs(ETF) (TZA)

Disclosure: No positions but longing for the days of TZA aka short TNA

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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