Trading Strategy

The bullish side of the market continues to be the path of least resistance and as long as support holds, we are still in a “buy the dip mode”. If there was such a thing as a Trump Trade, it ended several months ago, and the new reason for bullishness has become plain and simple earnings growth, the best growth quarter in years for the S&P 500 companies. The updated graph below confirms investors are trading “risk-on” with all the S&P higher risk growth sectors Cyclicals, Technology and Industrials leading the way higher over the past month. The defensive sectors on the right side of the graph are faltering as traders rotate funds out of these equites into growth stocks.