hey everybody it is good to be here
today my name is Brent Moors it is time for our weekly sector rotation and
inner market analysis webcast and tonight what are we talking about we’re
going to be talking about how to compare stocks to other stocks and stocks to
sectors and sectors to sectors and all that stuff but before we do that let’s
go and let’s check out the disclosures okay so if you take a look here what you
will see that is that you know in order to demonstrate the functionality of the
platform we need to use actual symbols however TD Ameritrade does not make any
recommendations or determine the suitability of any security or strategy
for individual traders any investment decision you make in your self-directed
account is solely your responsibility will be will be using paper money
tonight some and that is for educational purposes only and we’re gonna discuss
technical analysis tonight but remember that while we discuss technical analysis
other approaches including fundamental fundamental analysis because they’re
very different views all investing all investing involves risk including risk
of loss please no soliciting no photography and no recording this is our
agenda tonight and let me just give you a quick shout out shout out to mo
Prakash Vic Tom Fred and Samuel I guess thank you for joining me and everybody
we’re watching recording right now of this welcome to you too so tonight we’re
talking about we’re gonna go over the what kind of just a quick view of the
full market what the whole market is doing we’re gonna be talking about what
are some things that can potentially affect the market over the next few days
we’re going to talk about comparing sectors industry groups and stocks to
one another and then as usual what we’re gonna do is we
are going to we’re going to look at us sectors and asset classes now you know
this class is called sector rotation in your market analysis so we try and do a
little bit of that each week but we also hit another topic so then they kind of
mesh together they’re all important aren’t they so given that that is our
agenda the whole purpose of this is so that by the time you’re done by the time
we’re done tonight you’ll understand how to compare sectors industry groups and
stocks to one another so to do that let’s do this let’s go and let’s take a
look at the think or swim platform which you should see right now on your screen
and let’s just look at a few things here on this this is the S&P 500 large cap
big swings right low to high to low to high low kind of flat for a little bit
high low high looks like we may be topping out a little bit a one
traditional way that we look for a topping pattern yes I’m gonna zoom in
here yes to look for like a close below the low of the high day where’s our high
day that’s actually this day right here is higher than this day so that was
actually our high day where’s the lower that day right here we haven’t closed
below that yeah okay so a lower closed tomorrow though would looks like it
would do the do the trick unless it’s just down by a couple
pennies but it if it’s down then that would be a sign that some people use as
a bearish sign you know it’s not a no guarantee of what what the future is
gonna hold I guess but that’s one way to do it so that’s so just as large caps
have been on along or a good run we were saying that last week
we well it’s continued we’ve been on a good run but you’d expect it to breathe
or consolidate a little bit at some point looks the same on the Nasdaq you
don’t take out financials a little more technology heavily weighted and we get a
graph that really looks almost the same as the S&P 500 look S&P 500 Nasdaq
pretty similar isn’t it okay dal you’d expect it to look fairly
similar because let’s be honest it’s a large cap stocks it’s just a smaller
selection and we’re seeing pretty much the same thing over the last month small
caps again looks pretty similar we’ll go into a little more detail about the
exact performance of these let’s go to something that’s likely to look a little
different here are here is oil so this is west texas intermediate crude oil
we’ve gone up over the past month like the others but not quite as much but you
know across the board here this last month has been pretty strong it seems
like let’s go to gold except gold but gold can be kind of contrary right go
gold can be if if the markets scared or fearful gold tend to tends to do well
when the market settles down Gold doesn’t tend to perform as well and
maybe that’s what we’re seen and we could see the market settling down in
the VIX here this is the VIX if you are not aware the VIX is a volatility index
some people call it a fear index and the gist is the VIX measures implied
volatility zone options and what that means is when options become more in
demand which is typically when people are more fearful their prices go up and
implied volatility goes up okay so high VIX this is high up there up there up
there high VIX means more fear in the market typically also that’s when the
market tends to drop what the market been doing well wins at
what’s market been doing lately it’s been going up fear has been going down
hints aloe Vic so you don’t need to really understand options necessarily
but you can saw you you’ll hear the VIX referred to if you
watch CNBC or other financial news they’ll refer to the VIX if you watch
much you don’t refer to the VIX and that’s what this is it’s just a
volatility index there okay so that’s the overall let’s overall
market now what’s coming up this week well we more earnings we’re an earnings
season and if we go to let’s go to calendar how about we’ll go to our
calendar and what you’ll see is we have quote we at Qualcomm today CBS today on
their earnings front we have Disney coming up though right here Disney when
is that is that tomorrow or is it Thursdays Disney’s tomorrow right now
it’s showing me Thursdays excuse me it’s not showing me Thursdays but Disney’s
coming out tomorrow Duke Energy is a big company that is coming out on Friday
that can move the market what else can move the market well look Thursday
tomorrow we have initial jobless claims that’s lately you know it’s interesting
because in fact this is an important point there are some times in the market
when something will move the market has a propensity to move the market a lot so
for example if the if the market is really concerned about inflation then
things like CPI and PPI will move have a tendency to move the market a lot if the
market isn’t worried about employment then things like the initial jobless
claims can really move the market a lot well right now the market is not that
concerned about employment employments been pretty strong and so even if we had
a high number people would be more likely to kind of just write it off and
say oh it’s an anomaly it’s a 1-1 weak thing which is one reason why
people will use a four week moving average on that initial jobless claims
but it’s just not it’s not oh I don’t know the word it’s not in people’s focus
right now and so it’s probably less likely to move the market the other
thing is on Friday is down at the bottom of the page you can see University of
Michigan Consumer Sentiment preliminary report that’s kind of a biggie out there
and so be aware that that you know that’s something that can move the
market those are the main things that can move market right now
no Fed meetings right now I guess that’s about it okay so let’s get on let’s get
on with kind of what that we talked to them the headline thing of what we were
talking about today and that is how do we compare how do we compare stocks and
sectors well I’m going to suggest that using the TD Ameritrade com website it’s
actually a pretty good way to do so if you go up to research and ideas and
we’ll by the way we will look at we’ll look at the thinkorswim platform in a
minute as well but if you go up to research and ideas and go to overview
let me point out some things a lot of times we get stuck in stock mentality
okay in other words what’s this stock doing compared to this stock but
remember there are different markets out there okay there is a bond market there
is a currency market of forex markets there’s a commodity market okay and
there’s an international market not just a US market so weak what we can do is we
can look at those and compare and see how things are doing if we want to see
what’s happening in the fixed income we can click on fixed income and see what
how interest rates look okay this is an kind of an interesting graph this
displays essentially the yield curve so let’s go over how to read it real
quick okay so this is the yield or interest rate right here on the y-axis
and this line Dimon’s tone that well the x-axis is the duration of the instrument
okay here typically if you have something that is a normal positive
yield curve it’s gonna look something kind of like this okay in other words
the longer term you go the higher the rate is alright that’s kind of normal
now it will look at the brightest Green Line here
the brightest Green Line you can see is it’s mostly flat and then and maybe it
goes up a little bit here okay so slightly positive it’s sort of that but
a lot largely flat what about these other lines on here well that’s just
saying where it used to be this is saying where it was well look at this
one look at this one a month ago which is this let’s even get my little color
going it’s this one a month ago I’m gonna kind of draw with my red line
right over right on top if I can the other one do you see how it’s actually
going down okay see in that part it was actually going down
we had an inverted yield curve that’s kind of sort of flatten out a little bit
a lot of people were really worried about that inverted yield curve because
historically very often inverted yield curves have pre I don’t know if
predicted as a word pre predated recessions I guess you know so since in
the past we’ve seen in recessions and we look back and say oh the the yield curve
was inverted right before then it led a lot of people to concerned and in fact a
few months ago that was like all the talk oh no we have an inverted yield
curve but you know actually right now there’s a lot of positivity in the
markets in the economy so just interesting so you can compare my point
here on this is this you can compare other markets you’re not stuck to US
equities right you can go to global equities and compare international
markets as well but if you go to US equities okay what you can do is if you
scroll down a little bit you can look at sectors sectors down here now one thing
I would point out on this as we look at our sectors is that there’s long term
there’s short term at the top so if we’re looking at timeframe short term
well we have today if I want to pay too much attention to today you know
anything can happen one day one month three month but if we go back and click
on long term we have six months when you so realize that they have it that way I
don’t know if it was just because of lack of space they separate them out
that way or what but in any case this is there we go this is it and you can sort
by these columns if you like you can see what sectors are doing better if I go to
one month look at one month here because this is kind of interesting look at the
one month and I tweeted about this the other day in fact let me point out
something to you if you’re on Twitter you can follow me at be Moore’s
underscore TDA this was this was yesterday that’s a different tweet what
I wanted to show was hopefully I could find it here okay big change over the
past month cyclical sectors of surge and non cyclical like utilities and staples
have lagged so do you see do you see that here look at this staples and
utilities utilities and staples okay last month staples were down over 2%
utilities were down about 2% which is different because if you go back three
months you had a little better performance
especially on utilities in six months you’ll see the same thing better so
sometimes we can kind of say hey this is a sick I use some terms there maybe
you’re familiar with them maybe not these are non cyclical they don’t tend
to go with the rest of the market these things do better when the rest of the
market is doing a little more poorly these tend to outperform but you know
what the last month we have sectors like industrials and consumer discretionary
which are pretty cyclical doing a little better so you know sometimes it can be a
mixed bag but if we’re trying to find sectors too we can compare sectors on it
in terms of this way we certainly can do that and you can also look down the page
of particular stocks that are doing well but I want to focus on sectors right now
okay and I want to focus on here and I want to click on a particular sector so
let’s take one that has been doing a little better and over the last month
and I’m gonna click on health care well click on health care and look what
happens it brings up the health care sector you can see health care versus
the S&P 500 at the top of the page and you can this is one day chart again one
day’s pretty short term let’s do the last month and we’ll let that load and
you compare S&P 500 to health care they’re over different time frames and
here’s six months and I don’t know why that is it should be changing there okay
I changed and you can see for the year not so great but over the last month
it’s done a little better okay let’s scroll down the page a little bit
though because we’re in the healthcare sector and remember when we talked about
sector sectors are a little broader several industry groups may
a particular sector and here in this case we have our industry groups right
here so we say the sector is doing one thing but you know what some industry
groups are doing better than others and you can see that if we click on
performance there pay attention these tabs oh there okay we can look at
performance that way or you know I would endure and we mentioned that we’re gonna
be talking about some technical analysis and we could talk about performance but
you know what we can also talk about some fundamentals what’s the market cap
of various industry groups what’s the p/e ratio of various industry
groups dividend yield and so on and by cell ratios so in other words we can
compare what on the last page we were selling we were comparing sector to
sector on this page we are comparing industry groups within a sector we can
compare them fundamentally what pay that will pay the best dividend yields looks
like pharmaceuticals which ones are the most expensive compared to earnings and
it looks like health care equipment and supplies okay
which one have the best ratings by cell ratings and we could say by cell none of
these are right there but I guess health care providers and
services okay so let’s see let’s move on here there we go so we’re you can
compare by performance as well okay there’s performance and you can compare
those so comparing sectors sector comparing industry group to industry
group we can certainly do that if we want to jump in to will go healthcare
technology and click on that we can pull this up let me just try one thing here
there’s mine you can kind of zoom in see if that makes it a little easier for you
to see okay Vic was having a hard hard time
seeing there hopefully that’s now I have to scroll around a little bit more with
that but hopefully that makes it a little easier there so now we went from
sector to industry group to now within an industry group huh what do we break
it down further well actually there are sub industries okay and you can go to
companies here so here are within our sub industry of healthcare technology
and by the way just decide now I should mention I guess you can compare industry
to sector to market benchmark there okay S&P 500 let’s scroll down and you can
compare company to company and we can just look at the bigger ones here okay
so we can sort that is not what I want there we go we’ll sort this way and you
can find companies this way and now if we just want say companies that are mid
or large cap companies you can put a checkmark in next to and the general
cutoff it kind of depends who you talk to you probably but the general cutoff
is small cap are less than 2-billion mid cap is like 2 to 2 to 10 billion I think
and then large cap are 10 billion plus okay so I just checked these because
these are all 2 billion or more okay so we narrowed it down by sector to
industry group now I can take those I’ve checked them I can go to the bottom page
I can add those to a watch list now I’m going to create a new watch list and
we’re gonna call it set create a new watch list right there
and we’ll call it sec sector class November 6 okay and we’ll click on
create now let’s go let’s look at my watch list here now by the way on this
page of course I think I maybe already mentioned this you can compare all these
things but if we want to compare one stock to another and these stocks that
you put on the watchlist don’t all have to be in the same watch list in this
case that’s what I just did but over time I can add in more stocks if I go up
to my account and go up to watch lists and there we go there’s my that now let
me point out something that it’s hard to find unless you either just kind of by
dumb luck stumble upon it or you’re told about it because it’s pretty small see
that microcharts micro chart is going to enable me to compare one stock to
another stock these are my large cap stocks in the healthcare healthcare
equipment industry by clicking on microcharts zoom go here go here let me
just get a different time frame we can go to six months okay now of course I
can compare the charts but you already know how to do that probably but what if
we want to compare other things maybe we want to compare revenue
let’s look up revenue on this okay what’s our revenue on these we’ll go
back well three years its quarterly uh some of them better than others right
doesn’t mean it’s gonna continue that way in the future but that’s going up
pretty significantly Suren is going up t doc is going up good so most of these
are actually going up brother well let’s see I see if it converts into earnings
the revenue because you can grow revenue and and not have earnings grow at the
same time let’s go to three-year and click on go and here we not so much a
little different picture some of these aren’t going up so much
their earnings per shift so do you see how you can use this to
compare one to another that way so that is how you compare stocks to stocks and
stocks to industry group to industry group let me go back here and sector to
sector one other thing I should mention if you do have a particular stock I’ll
just click on CERN here for our purposes once you pick up the click on that stock
if you want to compare it to some other of its self selected peers you can click
on this tab right here this is pure comparison and there it goes and it’s
gonna pick out the competitors and lo and behold these are all the same stocks
I already checked but any cuz this is an alternative way
of doing it here of looking one thing to another so it kind of a different way of
looking at these charts stocks here ok so that is that is how to compare one
stock to another stock by the way if you go to charts let’s go to charts
here’s charts you can pull up comparisons there as well and you can
compare one company to another even if it’s not one of its peers and even if
you don’t go to the micro charts you can do this or compare to an index or
whatever you want there ok alright now you can compare using thinkorswim as
well let’s show you that oh let’s go here now let me just I guess mention
something here okay uh thinkers from some of you may be familiar with
thinkorswim and some may be not familiar with thinkorswim thinkorswim is
generally more active trading software platform or an options trading software
platform don’t feel any obligation you need to use it but realize it is
available for you and free for you if you like and and so that would be you know you can
give it a shot if you want there to download it if you’d like on the think
on the TD Ameritrade website under the trade tab it says thinkorswim under
compare prep platforms and click on that and download the platform let’s take a
look at our thinkorswim here and how do we compare well let’s do this let’s pull
up our sectors so here’s sectors ok and well I’m just gonna pull up the energy
now so here’s the energy and if I want to compare energy to another sector I
can or the sp500 I can you can use a comparison chart to do so you can simply
go up to studies either here or you can go over to little flasks there and there
is actually a study called comparison ok come listen right there it’s
alphabetical if you want to sort through them and the default there is the SPX
okay so you can click on apply ok and you can now this let me show you if you
are gonna use this a couple little little tricks number one go to over here
and do show prices percentage okay and that way we can see percentage movements
number two we don’t want the left axis right axis thing it’s hard to compare
one to another it’s much easier if you go up to the gear go to price price axis
and it says enable left axis uncheck that enable left axis uncheck that apply
and now let me get rid of my drawing here we’re gonna clear the drawing set
click yes oh boy it’s doing this here okay let me see if it’s not this isn’t
exactly how I want it I wanted it to look and sometimes it does that but let
me see if switching when I said doing that
don’t have any I’m one sec here Yubel left axis well I want the left axis no I don’t
want the left to access I want stupid show prices percentage again well I’m
not sure why that is zooming in so much it’s not giving us a
good graph there so I can have to figure out what I’m doing wrong there I’ve done
this a bazillion times and it is the the scale is 2 – hi there let me get let me
see if I do this huh well I don’t want to I don’t want to waste your time here
so I’m not going to spend too much time on this but I am hmm okay all right well I’m not gonna
I’m not gonna kill myself over this here we’re gonna go and let me just do one
more thing let me just try it one more time
huh I don’t know why that I don’t want that I want it this way
it’s these are too flat I’d like these to show a bigger the scale is too big is
is my point on this let me see if I find look at an individual stock here let’s
just do will go Nike for example hmm okay all right well anyway that is a
study you can check out at some point but for some reason I can’t get that to
work right now let’s do this let’s go to our style let’s let me go and let me
just pull up a plain chart and let’s look at sectors and how they’re doing I
already mentioned some but you can always use this I have sorted this by
this is sorted by a one-month return what have been the top performers
financial services industrials materials information technology all three of
those three the three the top four are very cyclical cyclical okay those are
all pretty cyclical Real Estate’s utilities consumer staples consumer
staples and utilities as I mentioned already are non cyclical okay non
cyclical and so it it shifts cyclical so it shifts right now cyclical or
outperforming means them market as Wells do doing better so if you want to try to
ride that real wave now I don’t know if the wave is gonna last or it’s gonna
peter out but you could consider focusing investments on these financials
industrials materials are the top three bottom three real estate utilities
consumer staples these are ones that you may consider
shifting weighting out of if you want to do a more of a shorter term one-month
sector rotation play okay can you go longer-term sector rotation yeah three
month and if I sort this you’ll see there’s a lot of overlap like the top
performer on both is financials the second performer information technology
on the three-month is same as the fourth performer on so you know you can see
there’s some correlation between them of course that probably makes sense because
within the three months is the last month to performance right so but you
can choose whichever we want if you want if you’re gonna do sector rotation now
and look for sectors that are strong you can start this way go to in this example
financials then you can look for stocks within financials you can do that by
going to a scan tab and running a search you can go to the the TD Ameritrade
website which we did earlier and I kind of showed you that earlier let me show
you the scan tab if I want to scan I don’t want a let me do this how’s it doing that
okay let me reset that yes okay there we go okay we’re gonna start from scratch
here scan in all stocks but you know what we just said we just said we’re
gonna scan in the hottest against doesn’t mean it’s gonna go in the future
but of the last month the hottest sector which is financials I’m going to go down
to buy industry go down to financials select all financials and we’re down to
financial stocks then what I can do is I could say hey I only want stocks that
are priced I don’t want a penny stock here I’m gonna put in stocks that are
priced at least $20 per share okay I’m gonna also find stocks that trade a
reasonable volume I’ll go up to a couple hundred thousand shares a day mm I think
that’s right there we go uh there now that would be really really important in
fact he’d probably do higher on volume if you’re gonna consider options on
these but if it’s just stocks that you you probably don’t need anything that
high I want companies in financials that are making money probably not not a
surprise their earnings per share I want this to be some positive number we’ll
just make sure it’s positive there okay and it’s just like we’re at a hundred
and ninety results we can add more in we can go to add a filter we can add a
fundamental filter and I can look for stocks that or paint a dividend dividend
yield current dividend yield at least we’ll say three percent okay how many
result we’re down to fifty results let’s do another one you see you can add more
if you want and you can you can do whatever you want I want to
at margin fairly high profit margin we’ll say at least 25% okay can scan
there and now we’re down to a certain number of stocks and if you want finally
you can certainly take these stocks and you can look for technical entry signals
or something else okay so let’s do let’s go add a filter let’s do a study filter
and we’re gonna do a we’re gonna do a moving average crossover of 10 crossing
over 40 if you are interested I did a class on this not long ago and we’ll
scan that and we have zero results let me just see that’s because everything’s been so
bullish let me just see if I can get rid of me let me get rid of my left column
here and try this again nothing okay well we got a couple well I
just HTH to illustrate this HTH is a financial stock we’re past earnings our
tin is crossing above our 40 if we go to studies and add a 10 and 40 moving
average so let me just do that real quick see that let me just modify these
real quick again if you’re interested in a moving
average crossover system I did a class on that well probably three weeks ago
and you can get that in our archives so you can add technical studies you can
add technical studies on it as well and notice we have the tin crossing above
the 40 okay so that I just wanted to illustrate that you can use
technical along with fundamental about criteria there and then if we want to
buy it you can simply right click on it by and we can buy a hundred shares its
cost us twenty five hundred bucks on that okay I’m gonna send that and I was
actually in the wrong account let’s do this again we’re gonna buy sinned there
we go and now we have an order in okay so how did we come about this how do we
come about this stock we came about this stock because we looked at what the
sector the stronger sector was we found that sector we then went to scan we
added in some scan parameters including in this case a 1040 crossover and
there’s I think we had a minimum share price of at least 20 bucks on there and
that came up and so that’s how we chose shall we chose that ah okay I think that
is basically what I want to show now uh-oh actually you know what I didn’t
I’m wrong I’m not totally done showing what I want to show because I wanted to
show I also wanted to show how different asset classes are doing as well there’s
different asset classes looking over the last month Treasury index has been creeping up we
hit a little lower rates and rates are going up and consequently with rates
going up if you look at the Treasury then price on Treasuries have actually
been declining question which one was the other stock Renasant I’m not
familiar with the company but that was the other stock there are NST they’re
Sunita and again of course these are not
recommendations or anything but we can see that’s how Treasury’s room you can
see value stocks have outperformed if we look over here this is sorted from this
is sorted from best to worst over the last month that’s just an interest rate
so I’m not going to worry about this value stocks have outperformed small cap
stocks of outperformed and emerging markets have outperformed you can go
through the same process that I just went with small cap stocks as we did now
I’m not going to run the full search but if I went back to my scan and instead of
scan and financials well you know what I could do I could do let me get rid of
mine well let’s do this let’s go to public Russell 2000 is small caps and
well those are actually already small caps but let me open up let me open it
up a little bit more and you can run your scan and come up with other stock
that’s how you add small caps in there intersected with the Russell 2000 all
right here we go what’s been the worst performers well as we mentioned before
well in that markets doing a little bit our gold seems to have tailed off their
gold has performed for poorly real estate a little more poorly commodities
doing okay but not quite as underperforming the benchmark is a
little bit as well okay now if you want to trade any of these a very common way
to trade these are by going to ETFs all right etf’s if you are interested in learning
more about ETFs check out kanye hill thursday 7 o’clock Eastern time using
ETFs so there you go there you go all right now let’s we are running out of
time folks in fact we are out of time I’m right at my limit I have two minutes
to wrap up let me just mention this everyone coming up next cam may Cameron
may is going to be talking about bullish continuation patterns bullish
continuation patterns that is coming up next so that’s a technical analysis hold
on my drawing tools have come on there we go
so just remember that in order to demonstrate the functionality of
platform we had to use actual symbols however TD Ameritrade does not make any
recommendations or determine suitability of any security or strategy for
individual traders any investment decision you make in your self-directed
account is solely your responsibility everybody thank you very much for
joining me today and oh one last question vixx’s is there a heat map for
sector rotation well there is a heat map you can look at you to help you view it
I’ll tell you what Vick check out my investor Q&A tomorrow and we’ll address
that ok heat map sector rotation and if you can’t catch it live I’ll put it on
the archive ok check out the archive on that and I’ll address that because you
can use that to try and find sectors and I will mark that down right now before I
forget so that I know to cover that tomorrow anyway thank you everybody for
joining me and I appreciate you all and have a great day and we’ll see you same
time next week bye bye everybody you you

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