In the Options Room we discuss market internals, volatility, and look for potential trades. Trades can be implemented in stock/ETF or options, says Ziad Jasani Monday. Watch Healthcare, Utilities, Real Estate and Staples.
View my weekly strategy session video here.
Recorded: Nov. 26, 2018.
Duration: 59:06.
U.S. indices were volatile Nov. 19/20 (Monday/Tuesday) intraday and overnight and closed outside the expected move, close to 2 standard deviation sized moves.
The bullish percentages declined (vs. week prior): NYSE is currently 37% (41%), S&P 40% (45%) and Nasdaq 38% (46).
Relative strength remains highest for Healthcare, Utilities, Real Estate and Staples in the U.S. markets. There were continued moves down in some major leaders such as BA, AAPL and NVDA, all of which had large gains YTD.
There was selling in some of the overbought safe stocks e.g. VZ, JNJ -- something to watch if markets reverse up.
The equal weighted S&P (RSP) is now outperforming SPY as market rotates away from the largest market cap stocks.
Watch the mid/small caps.
Foreign stocks and currencies gave back last week as weak economic data from Germany and Brexit chatter were reported.
Long term bonds (TLT) gained as 10-year rates decreased but low rated bonds (HYG) continue to drop, indicating credit risk concerns. Put buying in high yield bonds and short-term paper (BLK) were conspicuous, possibly tied to the oil drop. Oil (WTI, BRENT) continued to fall as did the Oil related ETFs.
The strength and momentum relative to the SPX as well as the weekly return is shown in the table below.
Sectors with the highest strength and momentum are shaded in green and the weakest in red. Blue indicates strengthening sectors which is where some of the foreign sectors are found.
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