Discretion Advised:
The consumer staples on whichever near term look back period seem a bit weak. But looking at the ratio chart below comparing the XLY to the XLP, which many gauge as a “risk on-off” tool for not just the consumer space but the overall market, one can see just how they have been outmaneuvered since the start of 2023. On a YTD basis, the XLY has gained 17%, while the XLP has fallen 2%. While the XLY hopes are pinned disproportionately on the backs of AMZN and TSLA, the top 3 holdings in the XLP also make up more than 35% of the ETF. PG has the look of a bear flag with a move below 139 carrying a measured move to 126. The second and third largest components in PEP and KO are swimming beneath both of their 50 and 200-day SMAs as well. Looking at the heavyweights inside the XLY, AMZN could not hold up after completing a bullish island reversal but is trying to maintain ground above the very round par number. TSLA is all about not letting the round 200 figure halt its progress for the third time since November.