In Greco-Roman mythology, the peacock tail feathers have “eyes.”
These eyes have a variety of meanings, that span across varying religions and cultures.
All seem to agree that the feathers represent something good, whether it be vision, protection, guidance or watchfulness.
The biblical interpretation of the peacock feather is one of immortality.
For the market, let’s use our “eyes” to look at its seemingly immortal bullish trend.
I purposely used a photoshop feature on the peacock feather’s eye to “swirl” the image.
To illustrate that although immortal, the market maintained a bullish sentiment last week mainly because of a rotation among sectors and groups.
Money flowed out of energy, oil and financial stocks, which had been leading, and into technology, industrials, transportation and utility stocks.
Real Estate stocks saw gains as well.
The best preforming sector of them all last week?
Even with the relentless bullish sentiment, I have a saying- “When Uncle Utes shows up at the door drunk, time to pay attention.”
If utilities are typically bought as protection, in the spirit of the peacock feather’s eye, protection from what?
Beginning with the rotation out of energy and oil, fundamentally not much has changed.
Threats of an increase in oil production by OPEC appeared. However, the Iranian situation looms.
Oil prices pose a double-edged sword. If lower, the cost to consumers is less of a burden.
However, oil measures global demand. Low demand can mean global economic slowdowns.
The flow of money out of financials after regulation rollbacks, is curious, although not unsurprising.
The interest rates eased up last week. After both hawkish and dovish talk by the Fed, folks went back into bonds. At this point, that, like utilities, is typically a safety play.
Money though, flowed back into semiconductors and transportation.
Netflix saw the biggest gain, soaring to new highs.
That prompted buyers back into other internet stocks as well as some hot tech stocks like Micron (MU), which gained nearly $10.00.
Yet, can tech keep the market happy? Can Netflix?
We turn to Transportation. As those who read my Daily know, I am all over this sector as the key to the economic and market health.
IYT did great. It took out resistance going back to February 2018.
With some help from the political arena (possible-but highly doubtful- tariffs on imported cars), should transportation stocks remain robust, immortality for the market bulls indeed.
This administration rewrites the adage, “Talk is cheap.” Not so much if you are invested on the other side of the talk. Talk can also be expensive!
Therefore, circling back to utlities, in a really strong market, one should not see too many buyers in bonds nor utes. But we did.
So, peacock feather eye of notorious guidance and vision, what’s up?
Utes like a lower interest rate environment, so there’s that.
Yet, investors cannot have it all.
The peacock, also linked to Kuan Yin, is a reminder to show our true colors.
This week, keep that in mind in the market.
Is our drunken Uncle Ute really a peacock feather in disguise, here to warn the bulls?
S&P 500 (SPY) Inside day. I wrote this every day last week-nothing changed-270 pivotal support. Thru 274 looks a lot better
Russell 2000 (IWM) Inside day Friday. If holds 160.60, over 162.35, looking at 164.50 area next stop.
Dow (DIA) Inside day. 245-250 trading range. Nothing has changed
Nasdaq (QQQ) 169.74 pivotal for Tuesday. Under 166.50, reversal time