Of the eleven major S&P sectors only FOUR remain in positive territory on a YTD basis, those being the utilities and healthcare, and both real estate and discretionary higher by less than 1%. The industrials, via the XLI, are one of four ETFs that have slipped more than double digits so far in 2018. The fund was unable to move above the round 80 number, which was a double top from the February highs. This year so far there were just two weekly CLOSES above 80, the weeks ending 1/12 and 1/26. The XLI is looking for another three week losing streak, in heavy volume of the fourth quarter. Between the weeks ending 10/12-10/26 it slumped 13%, with 2 of the 3 weeks being accompanied by volume double the average. Currently it has declined 3% this week heading into Thursday, and this is AFTER the prior 2 weeks dropped 7.6% in firm volume too. It is now is bear market mode down 20% from most recent 52 week highs, and has undercut its October lows and is well underneath its February lows as well.
GE Rising From The Dead?
It would be hard to discuss the industrials without mentioning General Electric. Agreeing with the consensus has never been something I like, but when a chart pattern emerges that COULD be a bottoming pattern one has to be objective and call it like it is. My strong preference is to buy strength, but certain bottoming formations could offer potential tasty rewards. Below is the chart of GE, and it is HIGHER by nearly 8% this week heading into Thursday, as the S&P 500 is DOWN 3.6%. This is nice follow through from last week when it rose 1.3% and the S&P 500 dropped by the same amount. The stock recorded a spinning top candle, which is known to predict at least a softening of the prior trend if not a reversal of it. There is a long, long way to go for this name to go, but it may start bringing good things to life, pun intended.