The following is an excerpt from North Star’s bi-monthly letter ‘The Rotation Report’

We’re seeing signs of a stall out in economically sensitive commodities.

The 10 week moving average trends in many energy commodities have quickly gone from up-trending to flat.

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This is notable as the dominant trends via the 200 wk MA are lower.

Moving to industrial metals, all of a sudden we see multiple weekly topping tails and signs of exhaustion at notable resistance levels.

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The trends are still higher, but this cluster of action is not a coincidence.

Looking at Materials Sector Relative Strength, we see it rolling over relative to the S&P 500 ETF SPY.  Is further underperformance in the cards?

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Our conclusion is this is a quality profit taking time and place in commodity plays.  Agile traders probably want to short or get out.  Long term portfolio managers probably want to check and reduce their exposures.

For premium research inquiries including ‘The Rotation Report’ contact: Aaron@NorthStarTA.com