• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock 45% of Market Capitalization In S&P 500 Showing Strong Sector Rotation
Stock

45% of Market Capitalization In S&P 500 Showing Strong Sector Rotation

by December 7, 2023
by December 7, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Usually, I would do this week’s Sector Spotlight on the completed monthly charts for November. But as we are gearing up for episode 200, I wanted to make it a bit more special. So what to do?

As I will be visiting the StockCharts.com office in Redmond next week, it made sense to skip this week’s regular episode and record the 200th episode in the studio next week. So, in case you were wondering why there was no SSL episode this week as usual… now you know. 😉

At the moment, the plan is to record the show on Tuesday morning, Pacific Time, and hopefully have it uploaded by the end of the day. However, we still need to do a, quick, review of the monthly charts and highlight a few observations.

Monthly Rotation

The monthly RRG shows a very clear rotational picture. Technology ($SPT), Communication Services ($SPTS), and Consumer Discretionary ($SPCC) are all either inside the leading quadrant or inside improving, heading toward leading. All three are on a strong RRG-Heading between 0-90 degrees.

ALL other sectors are inside lagging or inside weakening and heading toward lagging, and ALL are on a negative RRG-Heading. A very distinct rotational sequence in opposite directions.

This leaves little doubt as to which sectors are currently leading the market.

Technology

The technology sector is the only sector that recently broke to new all-time-high levels and is managing to hold there. Despite the strong rally it has already gone through, this remains one of the strongest sectors within the S&P 500 universe.

The monthly chart shows how, last month, $SPT managed to take out its previous high (July) and close and finished the month of November at the highest monthly close ever. That is not a weak characteristic.

This means there is now no real upside target, as we are in “uncharted” territory, while the recent resistance area, around 3100, can now be expected to serve as support.

Communication Services

This sector bounced against overhead resistance in the 240-245 area, which is the level of the March/April high. This can cause some short-term hesitation and keep $SPTS under pressure for a little while, but the series of higher highs and higher lows is still intact.

Combined with the strong rotation on the RRG, this makes Communication Services still one of the stronger sectors.

Consumer Discretionary

The third sector pushing toward the leading quadrant is consumer discretionary, the fourth-largest sector in terms of market cap and one of the larger sectors in terms of constituents.

After testing resistance near 1400 a few months ago, the sector dropped back to form a new, higher low at 1160. Out of that recent low, $SPCC is now underway toward the 1400 area again. A break beyond that supply zone will very likely trigger a renewed acceleration to higher levels.

45% of market capitalization showing strength

All in all, that means that. roughly 45% of the total market cap is now at a positive RRG-Heading on the Relative Rotation Graph, while holding up well on the price charts. This should give the market a solid base for further gains going into the new year.

Energy

On the opposite side of the RRG, the energy sector has the longest 12-month tail, showing a large and rapid rotation from high up in the leading quadrant all the way to low levels in the weakening quadrant and almost crossing over into lagging.

The accompanying price movement shows a third attempt by $SPEN to take out overhead resistance near 715-725, after which the price has started to move lower and seems to be heading toward the lower boundary of a range between 57-575 and 715-725.

Because of this move, I have changed the trend for this sector from Up to Sideways. I think the mentioned support area is extremely important. If that level gives way, it means that a massive double top will be completed, providing a potential downside target well below 400.

That has not happened yet, and it will likely not happen overnight or next week, but we better be prepared, because it looks significant. Be careful.

#StayAlert, –Julius

You Might Also Like
  • What Could Go Wrong This Week? Ummmm, A Lot!
  • Market Rally or Fakeout? How Politics and Earnings Are Driving Stocks
  • Stocks Plunge with Key Earnings on Tap
  • XLF’s Record Highs: Buy the Dip or Bail Out Now?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Santa Claus Rally Alert: Predicting a 70% Chance of Surge in the Dow Jones This December!
next post
Useful Directional Indicator Criteria for Your Success as a Trader!

You may also like

Week Ahead: NIFTY Stares At Crucial Support; RRG Hints At...

February 8, 2025

What NOT To Do as a Trader

August 30, 2023

DP Trading Room: Swenlin Trading Oscillators Top!

December 2, 2024

Sector Rotation Makes Technology Line Up With Strong Seasonality Pattern

October 3, 2023

MEM TV: Nasdaq & S&P Enter Downtrends After Tough Week

August 5, 2023

Timing the Market With the WillTrend Indicator

September 21, 2023

Finding Wholesale Opportunities

July 7, 2023

Equities Look for “Energy” in “Go” Trend

November 18, 2024

4 MACD Patterns That Will Give You an Edge

August 28, 2024

Week Ahead: NIFTY Prone To Consolidation At Higher Levels; Stay...

July 22, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,451 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Equities Struggle in Strong “NoGo” as...

    April 22, 2024

    Unmasking Market Moves: Why Focusing on...

    July 4, 2024

    Earnings Season in Full Swing: What...

    July 15, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here