As equity markets print new all-time highs and the CBOE Volatility Index ($VIX) prints 52-week lows, this should be considered a bullish outlook by all accounts. However, when you look under the hood, the internals with this rally concern me and, in my opinion, warrant buying some protection at these all-time highs. Time to Play Defense? Firstly, as Julius de Kempenaer, Senior Technical Analyst at StockCharts.com pointed out earlier this week, if you look at the Sector Rotation RRG Chart below, you can see that, over the past five weeks, the rally in the S&P 500 has been led by Utilities, Energy and Staples. While Technology has started to show a slight increase in strength this week, the market’s overall tone is clearly in defense. With Materials and Industrials also rolling over, we simply lack the confidence to call a strong bull market on the recent all-time highs. CHART 1.…
