Defense Wins Championships:

Of the two groups that displayed strength early on amid a sea of red, ones that were expected too, only one had staying power. The defense and energy spaces, both started on a strong footing, but it was defense that was a clear cut winner when the closing bell rang. The XLE CLOSED down, and more than 1% off its intraday high Friday, recording a bearish engulfing candle in the process. Sure it is very top heavy with integrated giants, and maybe the comparison should have been made against the XOP or OIH, both of which rose today. But let us give credit where it is due to the defense arena. The XAR advanced 4.2% the last 2 days this week alone, and 4.3% for the week, its third best WEEKLY gain in the last one year time period. It broke above a cup base pivot of 112.98 today on above average daily volume, and that is impressive given the ETFs second largest component TXT, is in bear market territory, 23% off most recent 52 week highs. Below is one of my favorite WEEKLY charts in the group of RTN.

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