However, it is the first day of December, which has a strong positive bias. This is the only reason why yesterday I kept and even increased my long positions, even though the 20DMF itself was negative.
I also detected that the MF in Biotech was negative, but I refused to act on that negative divergence, mainly because I wanted to be long at the close of yesterday.
XLE was showing a strong positive divergence early in the day, but failed in the afternoon as oil pulled back again.
Looking at the 20D pattern of oil, we can see that oil is not attracting sellers anymore. We might have reached a bottom. I will be looking at increasing my energy positions, but timing is everything!
When we look at the energy group, we can see that all the sectors had a positive Thrust, except for refiners. This does not mean that refiners will come down from here or that we should short them (they offer rather good P/E and most of them enjoy good margins.) This might be a sign that oil prices will increase - and therefore investors might anticipate that the refiners' margin will be lower in the coming months.
Materials attracted money yesterday, together with the gold miners.
Gold's bounce of yesterday looked impressive. I would not buy though.
I would also like to point to the HACK MF, which was also positive yesterday.
Conclusions:
Seasonality tells us to stay long. However, buying materials or miners because the sector has fallen "enough" is not a good enough argument. Energy looks more attractive, but I still think that the "easiest" sectors to buy are related to tech, internet, software.
The main issue is that large stocks such as AMZN, FB and GOOGL look weak and so does the Mammoth sector.
I bought a position in LNKD yesterday. YHOO could also be interesting.
