Rethinking the Consumer Narrative:
The discretionary space in 2024 has not been the place to be, as it continues to inhabit the worst performance among the 11 S&P sectors thus far on a YTD basis. The XLY is higher by 4% with 4 months left, and we know trends in motion tend to remain that way more likely than they are to reverse. Overall there were some ominous signs Tuesday with the weak action with new month money normally providing a bid, and holiday-shortened weeks which tend to be bullish (of course, this week has 3 days to go). But in general, we know snap-back rallies within bear markets can be violent and perhaps that is what occurred between early August and the present. We pondered whether the broadening out of names acting well excluding AMZN and TSLA would correspond with a breakout above a MONTHLY bull flag. PRICE did not confirm, and the next likely scenario would be a handle forming at 50 MONTH SMA support in a long cup base that began with a sound rejection at the very round par number in late 2021.