Rotation Is the Name of the Game, and Banks Are on the Up

 | Jan 04, 2018 | 10:54 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:












There are a couple of important themes in the early going. Most notably, there is a rotation into banks and financials. SPDR Select Sector Financial ETF (XLF) is breaking to a new all-time high as names like Bank of America (BAC) and JP Morgan Chase (JPM) move strongly.

The other theme is a slowdown in speculative trading of "junk" stocks. We have had a particularly good holiday season for trading, with bitcoin-related, cannabis, China names and biotechnology all offering opportunities. 

All those groups are slower today, and as a result there are only about 10 stocks on my scans that are up more than 10%.

You can see these two themes reflected in the small-caps, which are lagging, and the S&P 500 stocks, which are leading.

Breadth is still quite good, with about 4000 gainers to 2300 decliners, but leadership has shifted. 

One thing that has constantly confounded the bears is that there tends to be rolling correction, with the new leadership holding up the indices. There hasn't been a very broad selloff in a very long time.

I still have a few small-cap names on my radar today, such as Xunlei (XNET) , which is gaining traction on a story that Morgan Stanley (MS) has a large position. 

Telaria (TLRA) is an interesting chart of a stock that is just turning profitable, as its revenues jump about 70% in the last couple of quarters over last year.

The name of the game today is rotation. Start looking at some new sectors.

Columnist Conversations

Texas Instruments (TXN) announced after the close that CEO Brian Crutcher resigned due to violations of the c...
The initial upside target off the recent low comes in around the 333.51-337.71 area. Here is the updated ch...
A cup/handle is one of the strongest and most precise chart patterns out there, proven more often than not.&nb...
Today is 12 days up from the 6/28 low which is very similar to prior rallies of 11-13 days up.  This is r...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.