Bull markets correct through sector rotation. This is exactly what happened last week. While many tech stocks pulled back to their rising 20 and 50-day moving averages, we saw capital rotating into other sectors - transportation, solar, medical devices, homebuilders, biotech, gold and silver miners. In other words, the money is not leaving the market; it’s merely rotating into other sectors. This is why the dips in the indexes continue to get bought ferociously.
Positive results from Moderna’s vaccine study let to a one-day hefty rally in the industries that were hit the worst by Covid - casinos, hotels, restaurants, retailers, airlines. The problem is that they never followed through. On the contrary, we saw stocks that benefit from the rising Covid cases rallying for the rest of thee week - APT, NVAX, DVAX, QDEL, etc.
The market continues to provide incredible trading opportunities on a daily basis. Here are just a few of the ideas and comments I shared with subscribers last week: