Sector Rotation Begin on QE Hope
The SP500 rally from June 4th 2012 was led by (believe it or not) Utilities. Or a defensive allocation of capital. This ended after ECB Presidents statements of 'it will be enough' and then funds moved out of defensive to aggressive sectors.
But or is it simply profit taking on the defensive rally, or a trend change. The @RTDEF::@RTPRD cycle suggest that a 'risk on' period is due, and this correlates with the expected bullish trend during a presidential cycle. Risk is on until the angry bear wakes up. We hear that Merkel is back from holiday this week, so the news should flow should either confirm or deny the 'path of least resistance' bullish bias.
Very hard to break this cycle.
Listen how folks on TechTicker try to make a bullish spin, no matter how sad reality is. The truth is that this is a QE wait rally. Nothing more or less. Nothing to do with so called stock market valuations or economic fundamentals. We expect a slump in stocks, until the world wide central banking policy is clear.
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