Weekly Macro Analysis 30.03.24

Rotation into Value

Lumber to Gold: Risk Off

IEF/TLT: Risk On still

XLU/SPY: Risk Off

XLY/XLP: Risk Off

SPY: Another slight ATH

Volume and Breadth recovered this week: Small negative Divergence

eTorians sold Gold and Oil, other than that, they just stuck to their guns mostly.

Strongest: Utilities, Energy, Basic Materials

Weakest: Consumer Defensive, Consumer Cyclical, Technology

Conclusion: 

Last week I talked about a sector rotation and boy did we get it. 

Tech is out, and Value is so hot right now. 

Energy, Materials and Utilities are leading the pack, as far as the last week and the entire last month is concerned. 

This is not necessarily bad, it could also mean this Bull Market is broadening out. 

It is interesting though, because that was the theme of 2022. 

However this time, we see Small Caps breaking out and showing relative strength against large Caps. 

This in itself is a bullish sign for me. 

Still I would not be surprised if we saw a 5 to 10% Pullback in the SPY, maybe even more severe in the QQQ over the next few weeks. 

Again, I would not short this market, I used the past two weeks to shift more into Industrials, Financials and Energy, while at the same time holding the Goldminers since the Gold Breakout. 

If we do get a Pullback, it will be interesting to see, whether we see a resurgence of technology or new leaders emerging.