04Oct10:35 amEST

Turn That Frown and Chart Upside Down

The Dow and Nasdaq seem to be growing incredibly concerned with the latest failed bounce in the small caps this week, as yesterday's strength is being overshadowed by this morning's gap down.

As a result, I suspect recent hideouts for longs like Apple may now be more vulnerable than ever to finally pulling in for a bit of a reset. 

While the selloff is gathering steam in many parts of the market, we want to note those rotation attempts again, as quite a few energy names are green again. In addition, some ag-related plays are green as well.

Fertilizers like CF have been particularly impressive not just today, but with strong uptrends since the summer. And seeing CF green again this morning in the face of a red tape simply reinforces that notion. As we profiled for Members earlier this week, too, CAT DE are the main ag machinery players and have been steadily moving higher from improving charts. 

With this in mind, a "catch-up" play is a lesser known, small ag machinery play named Agco. 

On the AGCO daily chart, below, we can see the Duluth, Georgia-based play moving up and out of a potential bottoming triangle formation. Much work is ahead for bulls, indeed, to reclaim the declining 200-day moving average above and soundly start a new uptrend.

But the strength this morning is noteworthy given the sector rotation strategy bulls have been banking on to prevent a wide scale, ugly market correction into the midterm elections. 

Stock Market Recap 10/03/18 ... Waterfall Down; Opportunitie...

 
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