In today's update we're taking a look at the indexes and a few key sectors. This recent pull-back has turned out to be the most violent V-shaped rally we've seen in a long time, and the question is, how do we play it from here? I'm looking at the Russell for clues. As I have said for weeks, it was the first index to break down, and the first to bottom out, and so we will look to see if it stalls out at resistance. What we do know is the dollar has changed character, and is bullish on all time frames. Therefore, as the monthly squeeze plays out, we're looking for sectors that we can anticipate based on dollar strength. Gold is a clear one, as it should get hammered as the dollar rises. For the same reasons, oil should also continue lower. As far as individual stocks, Zillow (Z) is one that has shown relative weakness and should continue lower. PG is one that has continued higher regardless of market action, so I like it for further upside. TLT is consolidating, and despite the end of QE I anticipate bonds will continue higher.
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