Show Me Time:

The consumer discretionary space led the way higher for Monday’s surge with the XLY gaining more than 4%. Sure on a YTD basis, it has been lagging as it is just the ninth-best major S&P sector of 11 thus far. The top 2 holdings in the fund, TSLA, and AMZN each rose between 6-7% and did much of the heavy lifting as they account for more than 40% of the ETF. Other top ten components in NKE and TGT have both recorded sizable drawdowns at different times this year with ill-received earnings reactions. Below is the other major retail ETF in the XRT, which I have referred to as the “smaller cap”, more equal-weighted fund. Its WEEKLY chart shows it must reclaim its 50-day SMA in short order. The longer it remains underneath it the worse. Since the top holdings are essentially equal, it needs a much broader push from the space. None of the top constituents is more than 1.6% so it will need plenty of help to leapfrog its secular line. It will be interesting to see how this week CLOSES as it is options expiration week.

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