Materials Gains:

The materials group is looking to post their second best performance in the last decade in regards to its other 10 major S&P sector peers. The XLB finished runner up three times since 2007, with the other silver place finishes in 2009 and 2017. With one session left in 2020, the ETF has risen nearly 20%, and this year has been outdone only by technology, consumer discretionary and communication services. On the chart below of the XLB one can see the Bollinger Bands compressing the most that they have in the last 6 months, with a “squeeze”. This often signals a big, forthcoming move, although it does not predict the direction of the surge. Given the uptrend that the group has exhibited, it is most likely higher, but we do not take a stance until the move has been confirmed. The 72 area has been a level of rejection the last couple months, but if this level is pierced to the upside, look out above.

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