The XLY is looking at its first FOUR week losing streak in the last 6 months. It is off 1% this week, after the prior 3 fell by a combined, pedestrian 4%. That being said there are some worrisome factors, most notably some poor reactions to earnings recently. Wednesday witnessed some very weak showings by a trio of retail actors. Reliable laggards like URBN and JWN are now down 54 and 49% from their respective peaks. They fell 9.8 and 9.2%, but perhaps a bit more surprisingly was the behavior in LOW which lost 11.8%, and was unable to record the reversal HD did Tuesday after its own release. The latter is separating itself as the clear winner.
The old adage states “nothing good happens below the 200 day”. If that is the case the XRT is speaking volumes with a negative narrative. Currently it trades in bear market mode down 20% from most recent 52 week highs, and is sporting a bear flag formation which are generally continuation patterns in the prevailing direction. The ETF is looking at a possible first 3 week losing streak on 2019, lower by .9% so far, after back to back previous weeks lost well more than 3%. A potential handle on a long WEEKLY cup base of AMZN, by far the funds largest component, is looking dubious.
Plenty of stocks have been announcing secondary offerings as of late, and that may be a concern as new shares flood the market in addition to the recent plethora of IPOs. Below is a name that is holding near the secondary offering price, a good sign. The chart of TWNK, and how it appeared in our 5/17 Consumer Discretionary Report, shows a nice uptrend, in particular for a non healthy company as consumers are moving toward more nutritious foods. It also filled in a gap from the 5/8 earnings session. There are a couple things that are leaving a nice taste in the mouth of shareholders, pun intended.