Deterioration Under The Hood?:
Glancing at the chart below of the XRT, an ETF whose largest holding is almost “equal weighted” at 2% feels waterlogged. Thursday as tech broke meaningfully higher, the XLK was up 4%, and the XRT fell 2%. Is that an indication of real investor bifurcation or is there simply not as much capital around to spread around to other sectors? All that matters is PRICE action and it is pretty clear that the XRT is in trouble at the moment. It is now back to the start of 2023 when the overall market roared higher. The XLK is now firmly above the dreadful February highs in comparison. Some froth has come to the surface which captures my attention with possible negative implications. Examples include SG LL GRWG and ANGI all have which have gained between 60-80% in just the last couple of weeks. The XRT is lower 10 of the last 15 weeks, with 9 of the decliners CLOSING at or near the lower half of the WEEKLY range. The real trouble began just above par for the XRT in late 2021, and the “sideways” action for the last year between 55-75 may be ready to resolve to the downside. Recession speaking.