July 15th, 2008
Yesterday was a truly awful day today, the absolute definition of the words “whipsawed” and “rotation”. Take a look at the intraday S&P 500 chart:
The Index had a 2.8% move from its low of 1200 to it’s high of 1234; it closed with a 1.09% decline for the day.
And for rotation, check out the almost instantaneous revaluation of energy stocks. From near the open until around 11:30, oil & gas stocks dropped dramatically. Typical was the iShares US Oil & Gas Exploration and Producer etf:
The explanation for the liquidation in this industry group is that banks and other financial institutions were selling their oil & gas stocks to generate some liquidity. Who says that herd doesn’t run together.
And to where did they run? One industry that seemed to benefit was the medical products stocks as represented by the iShares DJ US Medical Devices etf:
For the first time since the 1990’s, the weighting of Healthcare stocks exceeded Financial stocks in the S&P 500 Index. Some of the names that look like they’re positioning themselves to break to the upside include:
- ABMD (Abiomed)
- EXAC (Exactech)
- MMSI (Merit Medical Systems)
- QDEL (Quidel)
- KNSY (Kensey Nash)
- VITL (Vital Signs)
- NUVA (Nuvasive)
- ACL (Alcon)
Get your little toe into this sector only without losing sight of your longer-term and overall view of the market’s general trend which still points down.