Broadening Strength?

In the consumer space, there are two ETFs that dominate the scene. Give credit for the RSPD rising 7% this week, its best WEEKLY gain of 2023 thus far. But the two big ones are the XRT and the XLY. Basically diversification versus concentration. The top 2 names in the XLY in AMZN and TSLA make up 42% of the fund and contrast that to the XRT where the top holding is well less than 2%. The strong relative performance of the XRT against the XLY speaks to “risk on” in the discretionary arena. Over the last month, the XRT has flexed its muscles higher by 5% as the XLY rose by 2%. Both WEEKLY charts have some technical appeal with the XLY completing a bullish morning star pattern reclaiming both the 50 and 200 WEEK SMAs in the process. It could be setting up an add-on buy point above a double-bottom pattern as well. The XRT powered higher after a rare doji candle (only WEEKLY doji of 2023). Both of these funds seem to have some mojo and that is a good sign for the markets as the XLY is the third-best major S&P sector of 11 YTD up 25%. Look for a nice year-end run.

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