Sector Rotation Sector Rotation Sector Rotation

JC Parets
July 2, 2024

Last night was the big LIVE Event that I host at the beginning of every month.

There is no better way to start a new month, and in this case a new quarter, than going one by one and identifying the direction of primary trends for the world's most important stocks and assets.

Just for perspective, here are the S&P500 and Nasdaq100 Quarterly Candlesticks making new all-time highs, again.

As you can see, these are the types of things you tend to see in bull markets. You do NOT see them in bear markets.

Throughout this exercise, we also want to focus on the assets that are, and have been, best to avoid.

Remember that scene in the movie Anchorman where Will Farrell is dying of thirst and says, "Milk was a bad choice"?

That's like the people who bought long-duration Treasury Bonds instead of stocks and other much better alternatives:

With the US Treasury Bonds ETF closing at new all-time lows relative to stocks, it's important to recognize which stocks are acting the best in this sort of environment.

And here's the answer: It rotates.

Sector Rotation is the lifeblood of a Bull Market. And this cycle is no different.

In fact, Tech and Growth stocks dominated the first half of 2023, for example, sparking the greatest first 6-months of the year rally in the history of the Nasdaq.

But prior to that, during the back half of 2022, almost everything was already working, EXCEPT Tech and large-cap Growth stocks.

That rotation came in just in the nick of time to start 2023.

And then if you recall, coming into the 4th quarter last year, a lot of bank stocks and small-caps had not been participating.

Then the rotation came as all those stocks ripped for the next several months.

Now it's time to see rotation once again.

And Energy is starting to pop up.

Look at all this former resistance from the prior cycle in Crude Oil, now turning into support:

There are Energy stocks finding support at key levels.

And there are Energy stocks that are already working to the upside and making new highs.

It's not just Energy, but other sectors that have been underperforming the past 4-5 months are getting rotated into as well.

We're seeing it in Healthcare and we're seeing it in the Industrials.

But which stocks?

We went over every single one last night during our LIVE Monthly Charts Strategy Session.

You can watch the replay here, download the slides, and review each of the new trade ideas with best entry points and price targets.

Check all that out here and then let me know what you think!

JC

 

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