The Closing Print live trading and financial blog during market hours.

The dollar is at highs again this morning, North of 103.06; as a result, futures are fading from overnight highs (ONH) at 2261.00. Currently the S&P500 (ES) is holding at 2257.00.

In light of the possibility sector rotation, we are watching XLP XLY for direction. We’ve traded a “Yuge” spike post election, that appears to be running out of steam. If Staples continue to outperform consumer discretionary, we could be in for a little dip.

xlp-xly

When this sector rotation happens between XLP and XLY, the ratio moves higher. Stocks like PCLN, Ford, Nike, Coach and Nordstrom, among others, are under pressure as a result. In a bullish environment, consumer discretionary should be moving higher. Staples should be moving lower.

jwn

Coach looks worse off, as it trades below its 200ma. RSI is weak. Volume suggests institutions are hitting the exits in this sector.

coh

Banks were trading off their highs in Europe, earlier this morning, so we are watching the financial components of (XLF) for any hint of weakness.

xlf

Utilities and Staples are considered “defensive” stocks, so when we see these outperforming we pay attention. While this action might suggest short term profit taking, we have to be mindful that the indices were all trading at “All Time Highs” and due for a respite.

xlu-12-19-2016

Many of the stocks in this sector are at or above their 200ma, trending bullish as we near the Opening Bell. Watch stocks like AEP, which show signs of a trend change in the making. RSI is rising, suggesting we could be in for higher prices short term. MACD exhibits bullish momentum.

aep

Watch List notes are in the commentary section. Healthcare might continue to rotate in favor of the bulls, if momentum continues into this week.

tcp-game-plan-for-12-18-2016-image

ALGN and MASI are from the IBD50 list. We would prefer a pullback to the 9ema for entry, so when we say buy at “66.62 or better” in the case of MASI, that means don’t pay more. It also means you could get a better fill if we see a small pullback, so don’t chase. RSI is embedded, signifying buying pressure persists as the stock rallies. Use a short time frame, like the 5 min for entry. Preferably we can get a SAR buy signal as an entry marker.

masi

SPY has multiple blocks traded at 225.45, so that is one zone we are watching this morning. It also happens to be the location of the 9/20ema on the 60min chart. The weekend video pointed out that we are currently trading below that level, so be aware that this level is resistance until we move bak above the moving averages.

TICK cumulative will tell us if institutions are in a buying or selling mood today, so watch you market internals for signals. Advance Decline should be bullish if you have that mindset. Personally, we are ambivalent and would like to “see it first”, as SunriseTrader likes to say.

Happy Trading – Vinny



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