Chart Talk {12.06.16}

Here's a few more of the charts that I talked about last week.  Remember, those charts were specifically focused on sectors of the markets that have not been favored by the Obama Democrats.  Please remember that this is not meant to be a political statement.  In every Administration you're going to have winners and losers.  The charts last week were meant to highlight those sectors that languished under the Democrats.  I'm sure we'll be able to point to something similar as the Trump Administration gets under way.  Charts again are from Tradingview.com and you can double-click on these to make them larger if you so desire. The first chart is a sector that Democrats have loved during the Obama Presidency, technology.  The sector chart shown below is the XLK.  Tech hasn't had the run-up after the election that we've seen in some of the other sectors.  It's more or less run in place since November.

The next chart is the Industrials represented by its ETF, XLI.  Industrials probably experienced benign neglect during the Obama Administration.  They have been not exactly loved but not hated either.  That's why I've included them today as opposed to last week even though their performance mirrors most of the charts we showed last Thursday.  These have also experienced a "rip your face off" rally since the election.  This is likely on the belief that the incoming Administration will promote policies that should favor companies that are represented in this index.  Time will tell on that.  Many industrials are dealing with legacy plants and labor costs that may not be as easy for new policies to fix irregardless of who's President.  

Finally here's the Real Estate Investment Trust ETF, VNQ.  This has not as much to do with the elections as a play on interest rates.  As the probability of higher rates has filtered into the markets this group, which is largely a play on dividend returns, has taken it on the chin.  VNQ has finally hit a level where it has found support in the past and higher interest rates seem to finally have been factored to a certain extent into the markets.  It's also oversold by our work.  I don't know if REITs have found their ultimate bottom but it seems to me the risk/reward equation is better down here than we've seen at any time in the past six or seven months.  Nice dividend yield also pays you to wait!  Note as disclosure that I have been a recent buyer of VNQ for personal and client accounts.  Please talk to your advisor, do your own homework or better yet hire us before you invest in this or any security you've seen us talk about in this post.  Actually that's good advice for anything you see here.  No recommendations and no guarantees from us so if you invest blindly then you're on your own.

Back Thursday.

*Long ETFs related to XLK, XLI and VNQ in client and personal accounts.  As related above I have been a recent buyer of VNQ in client and personal accounts.   Please  also note that positions can change at any time without notice or dissemination on any other form of electronic media.