This month we saw the stock market come off of its high. That dip ended in Monday’s panic selling, that took the VIX up towards 30. Such VIX spikes tend to coincidence with the end of dips and corrections and this seems to be the case again. However, we are seeing continued slow motion internal deterioration in the markets that will lead to a more meaningful correction later.
Right now, though, the market is in rally move.
The best sector to buy is a sector that has held up while the market has dropped (THAT IS NOT CRYPTO) and is now turning up.
That sector is the energy sector.
Take a look at the XLE ETF, which I own in my IRA.
You can see on the bottom of this chart how the XLE/SPX relative strength ratio has gone up in the past few weeks. XLE itself has traded in a range as the stock market dipped and on Friday broke to the upside. This looks like the best sector to buy for this current rally in the markets.
I talked about the overall markets in an interview I did for Jim Goddard of www.howestreet.com you can listen to here. There are a lot of junks stock that remain popular with people on the top 100 Robinhood list that should be sold before the year is over as this rally matures, imho.
-Mike
