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Consumer Sector Review: 11/20/19
Hanging Off A Wedge: As more earnings from the retail arena come in, HD the 2nd largest holding in the XLY losing more than 5% Tuesday after numbers, certainly did not help the XLY which slipped more than 1%. We are all aware of the issues AMZN is causing the ETF. Below we take a look at the more diversified consumer ETF the XRT, and it is at a line in the sand. It trades near the top of a bearish rising wedge, and has recorded numerous spinning top candles as of late, which often are accurate in signaling the end of a prevailing trend. Interestingly the third largest holding in the fund is a name SBH, which looks like it wants to fill in the earnings gap from the 11/6 session that rose more than 20%. The stock is on a 6 day losing streak, and the bulls should not have the mascara running down their cheeks just yet, but boy was that very round 20 figure hard to CLOSE above this month.
Technology Sector Review: 11/19/19
Software Acting Anything But: Often leading groups need a breather after extended runs. Between late 2017, and early this year software reigned supreme against its semiconductor rival. Clearly capital has been flowing into semiconductors since March, but is software ready to recapture best of breed status? Give credit where it is due, for software as the IGV is now just 2% off most recent 52 week highs. The chart below shows the fund acting well POST breakout from a double bottom recently, and last week registered its first 4 week winning streak since February. Sure volume has been declining recently, but that could be a positive going forward as many are non believers in the move thus far. Trade can return in earnest once the naysayers are converted. On its WEEKLY chart it is approaching a cup base add on through a 230.97 pivot. That was the high made back the week ending 8/2 which recorded a bearish engulfing candle, and sent the fund 25 handles lower to its trough. If the semiconductors and software can trade powerfully in tandem a Santa rally can be a real powerful one.
Consumer Sector Review: 11/18/19
Discretion Advised? The consumer discretionary space is seemingly in for a very big move. The direction no one can ever be certain of, but the pattern below of a symmetrical triangle, which is considered neither a bullish or bearish one speaks volumes. Couple that with the Bollinger Bands "squeezing", which is adept at predicting big moves, and one gets the feel that a large move is imminent. Of course the 800lb gorilla in the room, AMZN by far the largest holding in the XLY, will have a big say which way the ETF is headed. Today it did not participate in the overall rally, and over the last 10 sessions it is making a habit of CLOSING at or near lows for the intraday range, a bearish trait. This week AMZN displayed some weak relative strength lower by almost 3%, and give the XLY credit for finishing the week near the UNCH mark. The groups softness is not exactly new, as it is UNCH over the last one month period, and over the last 6 months is just the 10th best behaved out of the major 11 S&P sectors.