The Semiconductor Index $SOX broke out of it's range yesterday and is closing in on a 90-day high. A key development in a leading industry if this breakout level holds. #trading #investing #stockmarket pic.twitter.com/p6gNT7axDo
— Larry Tentarelli, Blue Chip Daily (@LMT978) May 21, 2020
Dow Jones US Trucking Index $DJUSTK
working on an 18-month weekly closing high – a bullish signal of the markets forward looking view of the economy. pic.twitter.com/8HckhdFY93— Larry Tentarelli, Blue Chip Daily (@LMT978) May 22, 2020
$DJ Housing index improving, at a 60-day high and the 50-sma turning up. $HGX pic.twitter.com/ak7tzhbBqE
— Larry Tentarelli, Blue Chip Daily (@LMT978) May 22, 2020
$DJUSHB
Dow Jones Home Construction index testing the overhead 200-sma & 50-sma turning up. pic.twitter.com/MIXoZk4ovd— Larry Tentarelli, Blue Chip Daily (@LMT978) May 22, 2020
An excerpt from last week's Members Weekly Trend Report, with a key focus on cyclicals coming into a breakout week.
I started buying energy and industrial metals in April & cyclicals have been moving up our Best Ideas Buy list for the last few weeks.
https://t.co/g5xp4pg2d2 pic.twitter.com/fVoDWg0pJ1— Larry Tentarelli, Blue Chip Daily (@LMT978) June 7, 2020
In most bull markets, some fall into the "all growth stocks/all the time" trap.
In reality, markets go through cycles & those of us actively trading in the late 90s remember how cyclicals outperformed vs growth for a few years. $XLI vs $QQQ 2000 – 2002 pic.twitter.com/jaSR9sOaBn
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 2, 2020
$MT
another big breakout, on the new highs list. #cyclicals #steel pic.twitter.com/DVzURYuBuj— Larry Tentarelli, Blue Chip Daily (@LMT978) December 15, 2020
$GE is +40% since closing over the 200-sma, just over 4 weeks ago.
Not bad for a 'sleepy smokestack' stock.
Many say you can't make money in cyclicals – once again, do you want to be right, or make money? pic.twitter.com/ATkoe6yIHa
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 7, 2020
Cyclicals still working.$GE and $MT both up +20% from my new buys in the last month. $GE on 11/04 $MT 10/15. This cyclical recovery still looks to have some legs. I expect pullbacks along the way. https://t.co/wx7rgfrOxI pic.twitter.com/KkACvJpwM6
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 16, 2020
Plenty of industrials on the large cap new highs list so far today including $CAT $DE.
It doesn't have to be growth OR cyclicals – both can and are working. pic.twitter.com/HceeJyZ1hb
— Larry Tentarelli, Blue Chip Daily (@LMT978) October 8, 2020
$MT is up 58% in 6 weeks since testing the 50-sma.
Cyclicals/value stocks often get dismissed as
"sleepy" but they can move just as quickly as tech and produce triple digit moves when they hit their cycle, which is where they are now. $MT went 5x from 2005 to 2008. pic.twitter.com/GpZ2BcgSN0— Larry Tentarelli, Blue Chip Daily (@LMT978) December 4, 2020
The ideal time to get into these moves is before they break out, in lower volatility. Cyclicals have been a major focus on the Members website going back to April/May. $GE +13% from last Wednesday's Buy. On our Top 25 Buy since 11/01.https://t.co/wx7rgfJpWi pic.twitter.com/bjQRBuk2KK
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 9, 2020
145 large cap new highs today- the most I can remember in quite a while – that's alot of uptrends & breakouts. No reason to try to call major market tops when the charts have been indicating otherwise-especially in cyclicals. These breakouts often happen quickly, as we saw today. https://t.co/Kk4BjN2l8U pic.twitter.com/Omd2q19Oda
— Larry Tentarelli, Blue Chip Daily (@LMT978) January 7, 2021
The cyclical/value recovery is still very strong. $DE $FCX $CARR $ITW $HON $IR all new highs today. pic.twitter.com/oYfxYsU2bR
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 5, 2020
Safe to say that value/cyclicals have moved into their cycle.
MTD:$XME +23.5%$XLI +17.0%$QQQ +11.0%Book some gains, raise stops and follow the trends works best for me. https://t.co/RuE50gT24T
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 28, 2020
Last year, sector rotation & cyclicals were dismissed by many. Experience is a great teacher & gave clues of what to look for. Those who were early to the move are sitting on major gains, and it could still be early innings.
Down YTD$XLK $XLC https://t.co/Ix2gYizG8P pic.twitter.com/AlGMkfQP75
— Larry Tentarelli, Blue Chip Daily (@LMT978) January 15, 2021
Many growth and momentum names continue to roll over with lower highs, lower lows and below key MAs. I'm still holding some higher beta tech in uptrends, but don't plan to get overexposed of chase any downtrends.
Growth/tech and cyclicals can both work – follow the uptrends.
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 16, 2020
Cyclicals are often dismissed as 'sleepy smokestack stocks'.$MT at $19.36 is +40% since my buy on 10/15 – not very sleepy for 6 weeks work.
As I've said before, cyclicals can produce tech like returns when they hit their cycle. https://t.co/RQSBWhAUGv pic.twitter.com/6cBeZXwJSZ
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 1, 2020
Many of the cyclicals that look extended on their daily charts may be, as they are prone to sharp pullbacks.
Dialing into the longer term charts adds perspective.
Having traded them in 2006/2007 helped to get them on the radar screens very early. World's largest steelmaker $MT pic.twitter.com/QzAVmt4pJR
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 24, 2020
Cyclicals – https://t.co/I1yXUae8k9
— Larry Tentarelli, Blue Chip Daily (@LMT978) October 9, 2020
I haven't had an airline stock on a buy list or as a holding for as long as I can remember, if ever, it's been a long time.
There are long side opportunities in high growth momentum stocks, cyclicals in uptrends & longer term trend reversals as well – a very diverse mix.
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 3, 2020
On every pullback in cyclicals, some call the end of the move, and that it's gone too far, too fast – maybe, anything is possible.
Looking at the longer-term charts put the current price in perspective. Could still be early innings.$MT Monthly pic.twitter.com/KBEJL8ywmD
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 1, 2020
I'm riding alot of uptrends in tech, industrials and materials right now Ryan. I still like the cyclicals recovery trade.
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 15, 2020
Should be good news for alot of the cyclicals.
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 19, 2020
There has been alot of debate online about growth or value/cyclicals. Both can and are working – at this part of the market cycle, higher beta names are outperforming.
— Larry Tentarelli, Blue Chip Daily (@LMT978) October 12, 2020
Once we understand how sector rotation works, it makes it easier to find the strongest stocks in the strongest groups and not follow prior winners on the way down.
All sectors and styles go through cycles of over and under-performance.
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 5, 2020
There was a time when it seemed only FAANG went up – now it has been the reverse, as almost everything else is working while FAANG lags.
Big breakouts in energy and small caps as well. $XOP $IWM #rotation
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 23, 2020
8 of the top 20 performers in $SPX YTD are from energy – 1 is from tech.
In 2020, there were 0 large cap energy names green on the year. It is important to understand sector rotation and not get locked into one sector.
— Larry Tentarelli, Blue Chip Daily (@LMT978) February 23, 2021
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Interesting data on factor rotation
h/t to @EconomPic for the chart: pic.twitter.com/eMh4HbkKLj— Larry Tentarelli, Blue Chip Daily (@LMT978) September 18, 2020
A current narrative online: ‘Small caps are more overvalued than any time in history’.
Reality: From the prior ‘record overvaluation’ cited, 12/31/09, $IWM doubled over the next 4 years & tripled over the next 8 years.
Many variables move markets, valuation isn’t one of them. pic.twitter.com/kPgs5xBuXR
— Larry Tentarelli, Blue Chip Daily (@LMT978) June 4, 2020
Those of us who traded through 1999 – 2002 know what real sector rotation looks like and were probably much earlier to this move than those who have only seen tech/growth up and value down.
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 14, 2020
Many in markets currently have never seen a real cyclical rotation before. The 25 year $FCX chart shows how volatile and extreme they can be. pic.twitter.com/gKX3GkOnjV
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 15, 2020
In bull mkts/massive QE we hear narratives about Moats, Rockstar CEOs & TAM. In Feb/March, they all got taken down.
Fact is liquidity, Fed policy, interest rates & sector rotation are much more of a factor than the Moat stories.
Manage risk – follow the charts, not the story.
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 9, 2020
$GE +37% MTD – big moves don't just happen in tech/growth stocks. This cyclical rotation is stronger than many expected, and is not a 'few days' process. pic.twitter.com/jD6bEClXLP
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 23, 2020
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Many have been doubting the cyclical rotation/recovery, assuming it has been a 'few days' occurrence.
Off the March lows:$XME +104%$XLB +95%$XLI +85%$QQQ +84% pic.twitter.com/MEV0HuKwR9
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 11, 2020
Over the last 100 days, story stock, (and one of my core names over time) $SHOP is -18%.$FCX no story, no moats, no 'pie in the sky' growth projections etc. (and another of my core names)
is +52%.The stories don't matter as much as price action, liquidity & sector rotation. https://t.co/sCNNDYlxbh pic.twitter.com/HBGg8VCTFK
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 10, 2020
$GS said today that it's "time to buy Value stocks" for a cyclical rotation.
Blue Chip Daily started to alert subscribers to the Cyclical rotation in detail starting on June 7 & has been a daily focus since.
Very likely still in the early innings.
???? https://t.co/RQSBWhjjOX pic.twitter.com/FiZr1GF9wJ
— Larry Tentarelli, Blue Chip Daily (@LMT978) October 15, 2020
Very possible Jeffrey – the cyclical rotation could have some legs as well.
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 2, 2020
I think there are some potential home run charts that are setting up here, but they aren't necessarily in the more speculative parts of the market.
It shouldn't be relevant if it's growth or value, cloud or retail, just what's working and can generate excess returns.
— Larry Tentarelli, Blue Chip Daily (@LMT978) February 26, 2021
$DE new highs today, no closes below the 50-sma since May. +178% from the March lows, not bad for a 'sleepy cyclical' stock. No reason to get locked into 'growth' or 'value' – just follow the strongest trends. pic.twitter.com/yJ50AamR0k
— Larry Tentarelli, Blue Chip Daily (@LMT978) January 7, 2021
We don't need value to lead for a decade, but the recovery in these stocks, when they revert to the mean or hit their cycle, can easily be triple digits plus.
— Larry Tentarelli, Blue Chip Daily (@LMT978) December 9, 2020
The cyclical/value recovery is still very strong. $DE $FCX $CARR $ITW $HON $IR all new highs today. pic.twitter.com/oYfxYsU2bR
— Larry Tentarelli, Blue Chip Daily (@LMT978) November 5, 2020
