Retrofit This Market to the Olden Days

Netflix is down by more than 7% as I write this after its earnings miss last evening, and shares of Amazon continue to lag the broad market as it has essentially done throughout this week. As two members of the glorious "FANG" leadership acronym, one would think that AMZN NFLX's weakness would be the impetus for a sharp market selloff.

Instead, at least for now, we have the musical chairs game of sector rotation very much in play this morning. 

Of note, especially, would be the XLV, sector ETF for healthcare issues. We noted the potential for rotation with Members earlier this week. I did not quite expect healthcare to thrive in the face of prominent names like NFLX getting sold on disappointing numbers, per se, given how correlated equites seem to be in the sense of either "risk on" or risk off since late-February. 

However, with names like ISRG, a true leader in XLV, leading the way higher there may be grounds for a return to market yesteryear where rotation will just be the major theme in lieu of macro, correlated trading. I still have some doubts about that, though, given the news flow and cycle we are in, be it The Fed, the virus, an election year, etc.. 

For now, putting in the work for XLV over the weekend will be a focal point for us inside the service. REGN, for example, is a name which is rather prominent during this cycle and one I expect to continue to do well long-term, pandemic or not.