Materials top?

Hello!

Other than the Canadian dollar chart below, I have been on hiatus for a long time. Since my previous post in June/July during the supposed H&S (which was the end of Wave 2 of 5? or B or A-C), ended in a little embarrassment for me, I took time off the re-evaluate my trading strategy.

In that time I decided I would use inter-market analysis more, and also cut down on the amount of charts I followed. I felt that the Materials, Energy, and Utilities industries appealed to me the most, and so since that fateful July... month... I have not ventured out of that comfort zone (except for a few extreme cases). Because of the sectors I look at, I spend a lot of time looking at the MXI, JXI, and IXC indexes, as well as oil, precious metals, base metals, and natural gas prices. Additionally, I watch the AUD/USD and USD/CAD relationships a lot as well.

Well, Materials has been my favourite sector since I trimmed down to 3, but I became bearish as of Thursday, which was yesterday. I shorted (CE) Celanese Corporation at 34.55 (with some success so far), (SSRI) Silver Standard Resources Inc at 27.76 (with no success thus far), and an old favourite long of mine, (PCX) Pacific Coal Corporation, at 19.52 with what I will call a kick to the head.

1 out of 3 isn't very good. However, looking at the chart I provided, and the overbought levels of the CAD and AUD against the USD, you could understand why I don't like the materials sector. Time will tell (probably by next friday) whether I am right or not, but I honestly feel that China is sending a message with their short-term T-Bill interest rate hike, and are also knee deep in it, because they're buying so much from Australia and South America with brutally unfavourable interest rates.

Anyways, there is some fundamental and technical reasons for my bearishness on the sector - so I have gone short, (and gone long in Utilities).

Thanks for reading!