Friday, January 08, 2010

Recent Stock Market Sector Rotation

A while back, I noted several lagging market sectors. A couple of the commodity-related laggards--energy and raw materials--have bounced back nicely so far in 2010. Yesterday, however, was notable in the strength among two of the greatest laggards: financial stocks (XLF; top) and homebuilders (XHB; bottom). Conversely, we've seen recent weakness among the previously strong technology shares. These rotational themes are providing opportunity for traders, even as the overall market is displaying relatively narrow ranges amidst a sub-20 VIX.