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.

 


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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:
 


 

 

R.P.

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 todd@minyanville.com.

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