Doji Knowledge:

As capital is likely to be rotated out of mega-cap tech it needs to find a home. Many funds are mandated to keep money in the market and if those managers are smart, they will flow to where gains have been forthcoming. Outside of energy, the industrials will be a likely spot they hone their focus upon. The XLI was the best major S&P sector of 11 Thursday and on a one, three, and six-month lookback period it is in the top 3 as well. Of course, on a more recent basis, the group has been helped out by some well-received earnings reactions. R was up 10% Wednesday although it may have trouble climbing above the mid-80s which has been a thorn in its side for the last 1 1/2 years. GE is up nearly 5% this week heading into Friday, CARR by 8%, and ROL by 13%. TXT is trying to reclaim its 200-day SMA here for the first time since Q1. Below is the chart of CAT which leaped higher Thursday by 8%, and for the week thus far has advanced 11%. The WEEKLY dojis, rare candles, that are adept at signaling potential trend changes played a pivotal role. This group’s strength can just be getting started. Do your homework.

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