In today’s briefing:
- Upgrading Staples and Health Care to Overweight; Stay Defensive, Expecting Test of YTD Lows on SPX
Upgrading Staples and Health Care to Overweight; Stay Defensive, Expecting Test of YTD Lows on SPX
- Since late November we have been discussing our expectations for a pullback, while recommending shifting exposure to defensives (Staples, Utilities, Health Care) and/or taking profits.
- The pullback is finally happening following breaks below 3910 support on the S&P 500, $177.50 support on the Russell 2000 (IWM), and $279 support on the Nasdaq 100 (QQQ).
- These levels are now resistance, while major resistance remains at 200-dayMAs/YTD downtrends. Stick with defensives/cash as we believe a test of the YTD lows on the aforementioned indexes is likely.
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