Consumer Confidence:
Consumer confidence rebounded in March after a three consecutive declines, almost certainly occurring with the ongoing rebound in the equity market. Price always has a good gauge on sentiment. As it applies to the consumer discretionary sector, AMZN the 800lb gorilla in the room, has plenty of sway as it comprises nearly one quarter of the XLY. Therefore it makes a lot of sense to look at its chart for possible direction of the space going forward. Below is the daily chart and notice the tight trade between the 50 and 200 day SMAs (the Bollinger Bands “squeezed” this month too). It has the beach ball held underwater effect, and the ball has been released and the path to least resistance looks primed to advance.
The Spinoff That Got Away:
Break ups are often a source of frustration, some more than others. The spinoff 12 years ago, divesting all of its shares, of Chipotle from McDonald’s has left a bitter taste. The ratio chart below shows dominance in the strength of CMG compared to MCD. We are talking growth versus value here, as MCD sits just 4% off most recent all time highs, not shabby at all. But when one looks at the YTD gains of the two, CMG is higher by 54% and MCD by just 3%. The round numbers came in handle as they often do as CMG burst above a 501.98 double bottom pivot on 1/10, and then motored past a bull flag at the 600 figure.
Examples:
The automobile names have been a tricky play as names like F have been dead money at best for years, and that stock still bleeds 29% off most recent 52 week highs. GM has had recent issues with the round 40 number, but its acting somewhat better than F, off 15% from its most recent ascent. Below is the chart of RACE and how it was highlighted in our 2/27 Consumer Report. It continues to ADD to its 14.3% weekly gain ending 2/1, and is racing toward an add on weekly double bottom pivot of 142.62 in a base nine months long, pun intended.