Coach Mark here.

As we head into the new week the markets are attempting to rotate. This is something that we have not seen very much of in the last couple of years. My brother Matt and I did a feature segment on this potential rotation in the Trading Justice podcast yesterday and you should check out the extended conversation there.

In a nutshell, The Mag 7 has had a fantastic year while other areas of the market have not participated as much. We saw the “other areas” of the market (symbolized by RSP, the equal weighted index of the S&P 500) play a little catchup recently. We also see some of the best trading patterns heading into the week coming from the “laggards” of the market. The markets are clearly attempting to rotate from one area of the market to another. In this case there are a lot of stocks in the “other” category given the price action in 2023.

Rotation historically is a normal occurrence. My brother Matt calls it the “hallmark of a bull market.” Will the bulls be successful in this rotation? Time will tell but the attempt is occurring and could be the nice source of a trade or two for those so inclined.

Have a fantastic start to your week!

Chart of the Day: Small Caps

Small caps are symbolic of many stocks of the attempted rotation having lagged so far behind in 2023.

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