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S&P Market Overview – Focus on Rotation to Materials

Posted by nexvucapital on February 2, 2013

On Friday we saw a broad rally in all S&P market sector ETFs with the Materials sector leading the way up 1.6% on the day. The following image breaks out the S&P sectors on a Market Cap basis.

Sector ETF - February 1 2013

Looking specifically at the S&P Industrial Metals Index, we can see that 2012 put in place a reverse head and shoulders (S,H,S) basing formation. The current 5 Wave break out from this base is in progress and we have taken the liberty of demonstrating what the balance of this 5 Wave pattern may look like if the current rotation to mid-cyclicals continues.

GYX Weekly - February 1 2013

Now we look specifically at the Weekly Copper chart which had a very important week as it seems to have confirmed a breakout above the consolidation pattern that has been ongoing for 18 months. We again have taken the liberty of demonstrating a potential move for the current Wave #3 which should exceed the Wave #1 high at $3.85 on its way to overhead resistance at the $4.00 level. The Wave #2 correction was steep so this sets up a shallow/flat Wave #4 correction which should find support at that $3.85 level prior to a Wave #5 final push through $4.00 to complete this 5 Wave pattern.

COPPER - Weekly - February 1 2013


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