Three-Card Monte Market

As the S&P 500 Index continues to deal with its first 50-day simple moving average test since August, we are seeing a three-card monte rotation game below the surface.

Capital has been shifting back-and forth-between the perennially weak industrial/materials/energy complex and the suddenly beaten-down biotechnology and healthcare space. Come tomorrow, one can only guess under which sector the three-card monte pebble will be.

Crude oil is also coming in, reacting to initial overbought conditions. Unless you have been buried in the energy sector for months on end, there is no reason yet to be too giddy about a major bottom--If it is a bottom then there will be plenty of time to enter. In the meantime, expect more violent shakeouts like we are seeing today.  

Precious metals and miners, frankly, are handling their overbought conditions initially better than crude.

Into the final hour and tomorrow, I am looking to see if the GLD ETF for gold follows silver higher into overbought conditions, likely back over $110 providing a good trigger.