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Gabe Varga
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Gabe Varga, CMT, is the founder and president of Axiomix, Inc., an investment research firm that provides technical analysis and algorithmic asset allocation models for mutual fund and ETF investors. is a market research tool that was developed by Gabe for tracking the sector rotation... More
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Axiomix, Inc.
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ETFnext: Sector Rotation
  • Sector Rotation: Junior Gold Miners And Utilities Emerge As The Two Strongest Sectors During The Recent Market Sell Off  0 comments
    Mar 14, 2014 8:36 AM | about stocks: GDXJ, XLU

    Equity markets sold off this week due to worries about the escalation of the Ukraine situation and the fears about the potential weakening of the Chinese economy. Few sector ETFs were able to make higher highs in this negative market environment. The two exceptions are the Market Vectors Junior Gold Miners Fund (NYSEARCA:GDXJ) and the Select Sector Utilities SPDR (NYSEARCA:XLU).

    The chart below shows that the multi-year bear market for GDXJ ended in February by breaking the downtrend line. GDXJ moved sideways in a consolidation pattern in the last few weeks, but broke out to a new high yesterday on increasing volume, which is a very bullish sign.


    The relative strength plot of XLU (top panel on chart) measures the performance of the investment versus the S&P 500 index and is a great tool to study long-term market trends. For XLU we can see an improving relative strength starting at the beginning of this year. Moreover, XLU was able to make a new high during the market sell off yesterday, which is very bullish.


    Additional sector rotation investment ideas are available at

    Stocks: GDXJ, XLU
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