Todd Harrison: Sector Rotation Dominates the Market After February Payrolls

By Todd Harrison  MAR 07, 2014 10:50 AM

The biotechs, banks, and transports will tell the tale today.


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO.

The new phonebooks are here, and the February payroll is out. Let's dive right in.

The number was better than expected -- which is a good step for the economy but a bad sign for the taper. For a long time, bad was good (bad data equaled more tapering), so we must consider the other side of that sword.

I'm watching the biotech sector as one of my primary trading tells; IBB (NASDAQ:IBB) 260, as discussed yesterday on the Buzz & Banter (subscription required) and again this morning, should provide clues to the short-term tech fuse.

Looking the other way, the banks and transports will help the bulls if they can push through BKX (INDEXSP:.BKX) 71.50 and TRAN (INDEXDJX:DJT) 7600, respectively.  A move through those levels will help qualify (confirm) the breakout in the S&P (INDEXSP:.INX), if and when.

As I write this, the biotech complex just took a hard turn lower as the banks and trannies are trying to lift higher. The bulls will argue, "Rotation, rotation, rotation!" but they can only say that if they do so in their best Mel Brooks voice. 

It's a recipe for "S's over N's," or S&P outperformance of NDX (INDEXNASDAQ:NDX), at least for the session.

Random Thoughts:




Twitter: @todd_harrison

No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.