"Finding Outperformance in Choppy Markets" | GoNoGo Charts (02.16)
GoNoGo Charts • 24m
Starting from the top asset class level, GoNoGo Charts help investors understand intermarket. Both $TNX and $USD are gaining strength on a daily basis from amber bars of neutral uncertainty to Go trend conditions. The recent rise in rates and the dollar index have a subtle but observable negative impact on further price gains in the equity index. Given the whiplash daily reversals on the S&P500 over recent weeks, Alex Cole and Tyler Wood, CMT explain the process and tools that investors can use to narrow their universe of securities to those in the highest performing sector, industry group and down to individual names. Remember, it is a market of stocks, not a single Stock Market.
Looking at the GoNoGo Sector RelMap, viewers can see a rotation of leadership in the past two weeks from the cyclical sectors (XLE, XLF, XLI, XLB) to the growth sectors of the market (XLK, XLC, & XLY) including technology, Communications, and consumer discretionary sectors. The next step in the process is to look for the industry subgroups that are outperforming those sector leaders. Within Technology (XLK) this includes $DJUSSC – Semiconductors, as well as computer hardware. Highlighting the sustained “Go” trend conditions in NVIDIA Corporation $NVDA, Alex and Tyler showcase the disciplined process for managing the lifecycle of a trade using this top-down methodology to help investors “Fish Where the Fish Are.”
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