The stock market has been flipped completely upside down


upside down guys in suits
A
couple of traders, doing their best impression of the stock
market so far in September.

Reuters

Take everything you thought you knew about the stock market this
year and throw it out the window.

After eight months of tech and healthcare dominance, the
record-breaking SP 500 has assumed a
fresh new face in September, being instead led higher by energy
and telecom shares.

Digging deeper, as the scorching-hot FANG
stocks
— Facebook, Amazon, Netflix and Google — have headed
toward correction territory this month, energy producers have
stepped up and largely filled the void, aided by a surge in
crude oil prices.

This resilience shown by the SP 500, which just last week
hit a series of new record highs, goes a long way towards
disproving the notion that the stock market is trading at the
whim of the tech industry. That’s good news for bullish traders,
and a comeuppance of sorts for skeptics that warned against a
market reckoning in the event of tech weakness.



spx sectors


The
best-performing sectors year-to-date through August have mostly
faltered in September.

Business
Insider / Andy Kiersz


The rotation occurring underneath the surface of the SP 500
this month — out of tech and into other more attractively-priced
areas — has played out on a smaller scale a few times in the
past several months. On multiple occasions, exchange-traded fund
data has supported the idea that money pulled from
tech
has simply been reallocated elsewhere in the stock
market, keeping indexes afloat.

“Sector rotation has been a defining characteristic of equity
markets throughout the spring and summer,” Fundstrat Global
Advisors technical strategist Robert Sluymer wrote in a recent
client note.

This dynamic has also been in play outside the confines of
sectors. Looking strictly on a return basis, the top 20% of
stocks in the SP 500 in 2017 through August have evolved
into the worst-performing quintile in September. On the flip
side, the bottom 20% from the first eight months of the year is
now the top quintile this month.

And records are being hit all the while — just the latest
impressive sign of resilience for the 8 1/2-year bull market that
refuses to die.



spx quintiles


The
best-performing SP 500 stocks through August have been the
worst in September. The inverse is true for the worst
performers.

Business Insider / Andy
Kiersz


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