It’s not for me to speculate the reasons behind any market move or whether anything is justified or not, but I find it interesting that those that do, have glossed over the fact in the recent weakness ‘defensive’ names have acted anything but defensively. In fact, they’ve been leading to the downside. Of course, those with a bearish narrative will jump on any weakness as a confirmation of their view, but it’s noticeable to me the exits posted on here recently have mostly been in names defensive in nature, coinciding with the weakness seen in consumer staples, utilities and transports. And yet, just today in another weak session we saw a momentum name like $GILD make new highs, something conveniently ignored by the bears. They seem to have overlooked the possibility that what we’re really witnessing is simply a case of further market rotation rather than the beginning of the much-anticipated correction.
Either way, we will let price decide. For now, we have another exit, with a trailing stop hit on $CMS for a small profit. Even adjusting for the dividend which I know some of you like to do, this has still done enough to warrant us leaving the scene. We still have a long in $SRE on the books which doesn’t look far behind.
Long $CMS 3/17 +3.8% (incl 4/30 div $0.27, 7/30 div $0.27)