Trend Signal Now: Rotation Is Driving This Bull Market

Thursday, February 6, 2025

In bull markets, the laggards tend to catch up to the leaders.

That's how this works.

In bear markets, it's the opposite. In a scenario where breadth is deteriorating, and the market in general is falling apart, it's the final leaders that catch down to the laggards, which have usually already been dragging down the market.

Notice how we keep seeing the opposite of that. Again, it's the laggards that are catching up to the leaders.

During the first 6 months of 2024, for example, which do you think was the worst performer of the major sectors?

Consumer Discretionary.

Now, over the past 6 months, which is the best performing sector?

Consumer Discretionary:

Rotation rotation rotation.

That's the name of the game.

So what comes next is to dive into which types of consumer stocks are driving this sector.

It's not the homebuilders, which are 20% off their highs.

Those stocks are trading with Industrials anyway. It's really more about the actual consumer stocks, retail specifically.

And when it comes to retail stocks, my friend Jeff Macke is the man.

I've been reading his stuff for years. If there's a big move happening in the consumer — he's already on it. Not just breaking it down, but explaining why it matters in a way only he can.

You probably remember him from CNBC back in the day. Or maybe from his book "Clash of the Financial Pundits." Either way, the guy knows his stuff.

And his latest post? It's a must-read.

Peloton just ripped 20% higher, torching short sellers in the process.

Jeff breaks down exactly why PTON isn't dead — and why he's still long.

Read Jeff's latest blog post here.

JC Parets, CMT | Founder, All Star Charts

All Star Charts emails are a financial publication of general circulation and only offers impersonal advice, not tailored to individual needs of a specific client or group. Any comments or statements made herein do not necessarily reflect those of All Star Charts or its affiliates (collectively, "All Star Charts") and do not constitute buy or sell recommendations. Unless specifically indicated, this message is not an official confirmation of any transaction. The contents of any email communications to or from All Star Charts may be monitored or reviewed at All Star Charts's discretion. All Star Charts accepts no responsibility for any loss or damage arising in any way from the use of this transmission and any attachments; it is the responsibility of the recipient to ensure that they are virus free. If you reply to this email, please note that we are a public investor and do not want any material non-public information. We do not agree to keep confidential any information you provide and do not agree to any restrictions on our trading activity, except pursuant to a written confidentiality agreement executed by All Star Charts.

Want to change how you receive these emails? You can manage your preferences here

unsubscribe