Lightning Fast Progress:
The movement not only in the consumer space but in general within markets to start 2023 has been startling. The textbooks say wild, volatile trade is hallmark topping action (bottoms are formed in a slow, gradual rounded manner), but we know those pamphlets are best used for kindling. Looking below at the chart of the XRT it has witnessed a fast move and it did get ahead of itself and needed a breather which was provided this week. In fact, it is now on a 6-session-losing streak after a reversal on 2/2 which was declared one of the largest short-covering days in years by GS, in the largest daily volume in 7 months. On 2/3 a bearish shooting star and is now looking like a retest of the ascending triangle is in the cards. If one thinks the recent surge from the rough 60-75 level which took just 24 days from 12/29/22-2/2 was rapid, it registered almost an identical move in 15 days between 7/27-8/16/22. It is not seen on the daily chart below but investors will soon find out if that was a double top. This week the XRT slipped 6.4% giving back nearly all of the prior week’s 6.9% advance. Bulls and bears are locked in and the near-term direction should be decided in the next week or two.