Those Pesky Industrials:
During the tumultuous last one month period it would make a lot of sense to look at what groups held up best after a very robust January. Only two major S&P sectors have advanced during the time frame, both fractionally, in technology and industrials. Some names in the industrial arena have not held up well like an LPX that has shed 20% alone in the last 3 weeks. XYL is attempting to remain above the very round par number after slipping 10% since an upside gap fill from the 1/20 session on 2/7. Heavy construction has done well, a lot of the “heavy” lifting in the group, and names like KBR PWR and EME have risen handsomely after well-received earnings announcements. Below is the WEEKLY chart of the XLI and this very round par number has held the ETF hostage somewhat. The week ending 8/19/22 provided a double bottom breakout pivot which we remain above and it just feels like this time around, opposite of the 2021-22 period, the path to least resistance is higher. Bulls do not want to see this lounge for a year bobbing above and below 100, but above 104 in the short term, this feels ready to storm upward. If it can not accomplish that by the end of Q1, something akin to a “time stop” would be appropriate.