Rosy Consumer:  

I have no idea how well the consumer is doing as we continue to hear that they are in the best shape they have been in for years, and on the other hand, more than half can not afford a $400 emergency bill. I leave it up to the charts to convey to me what the underlying situation is and if you look at either the top-heavy XLY or the broader-based XRT, each looks healthy. The daily chart of the XRT has the look of a cup with a high handle base or a bull flag, either a good sign. The XLY is flirting with a breakout of its own from a cup base and this could be ready to gravitate toward an all-time high above 200 made back in late 2021. Some top ten holdings in NKE and SBUX (both big China plays so if that region can turn around will be a tailwind) look very similar treading below both their downward-sloping 50 and 200-day SMAs, on a very bullish tape is concerning. They can give the fund a boost with a move higher, but nice moves from HD and LOW are helping. Home improvement peer FND confirms the fine sentiment in the strong space after a well-received earnings reaction and watch in the near term for a break above a cup base trigger of 116.80.

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