Trends Persist:
We often mention here at ChartSmarter that trends tend to persist, more likely than they are to reverse. The sentiment could be akin to the famous quote, “markets can remain irrational, longer than you can remain solvent”. Of course in a nutshell it is laborious and expensive to fight a tape, whichever direction it is leaning. A good example of this could be, the is the ratio chart of the XRT compared to the XLY, and how it appeared in our 12/24 Consumer Note (first paragraph of the report). Fast forward to today, and for the week heading into Friday the XRT advance of 6%, is doubling the 3% gain of the XLY. The strength in the more “equal weight” consumer ETF is demonstrating force, and although I am a believer in a more concentrated portfolio, than a diversified one, the composition of the portfolio is important. AMZN is by far the largest holding near 23% (new addition TSLA should help being the second largest weighting), and it has weighed on the fund going nowhere essentially since September.