Give the industrials a ton of credit. They have been overshadowed by technology and discretionary in 2023 but the group as a whole as measured by the XLI is the closest to its 52-week highs of any of the 11 major S&P sectors at just 1% (XLC is also just 1% off its annual peak). Tuesday the XLI broke above a bull flag formation not long after the WEEKLY diamond pattern we spoke of recently, and we know the best breakouts tend to work right away and POST the move. The fund gained 1.2% and the gain would have been much stronger if FDX was the 3rd largest holding instead of UPS, which we discuss later in this note. Most of the top 10 components are struggling a bit technically, but some may be coming to life. DE may be forming a bull flag with a bounce off the very round 400 number and just above the 200-day SMA as this month broke above a string of lower highs dating back 8 months. GE continues to hold par. If these large-cap names in the XLI can get their act together it is going to be a strong second half for the industrials.