The nascent topping of SOFTWARE turned into a route yesterday as the big money dumped the heck out of the group. A bunch of names down $5-25 as the air came out. Take a listen to yesterday’s radio show for the explanation on why. The short version…in late stages of a bull move, the big money is usually over-owned, over-loved and over-leveraged into the group, thus the drops are sharper. Yesterday is exactly what happened. Other growth names were also hit.
But…as we told you, we think bonds have topped for now. But we think it more a short term top. We will let you know if it turns into anything more. This has helped the financials, especially the regionals.
Oil prices look like they are breaking above range. We are now seeing money flows into oils. Keep in mind, they are very seep down in their chart patterns but it’s a start.
Same for many commodity areas.
The big 4 majors remain above the 50 day. This must continue. Better action yesterday in the smalls and mids as no doubt there are a lot of value plays in them. Yesterday was about value as the weakest of the weak in areas like retail got bid up off lows.