The R2000’s longest streak is 11 months ending Jun ’83. Long-term wave count argues we have only just completed half of the longer-term strength wave off the COVID Mar `20 low”. More near-term, the R2000 is in middle of its fifth and final wave that extends rally to 2750 by Jan `26 before consolidating gains in the 2600 area. Next move should push to new highs by end of next week and likely sooner.
Sector rotation. Health Care remains the key sector led by BioPharma though its other industries (save HC Tech) remain under modest relative accumulation. Industrials’ resurgence is being led by Aero & Def, Commercial Services and Building Products – it is the only sector with no red zone industries. Consumer Discretionary leads relative momentum into holiday season. Tech remains hindered by Software, Hardware and now IT Services but there are some bright spots in Software holding up or breaking out. Financials continues to be uplifted by Banks and Consumer Finance. Energy pulled back further (led by Oil & Gas) though we still believe this move should prove short-lived. REITs have retraced all of their recent gains.