Breadth Booming:
Is there something going on under the surface with the consumer feeling ebullient? The data may not support that belief but as a technician, my philosophy is that charts do not lie (and they tend to look ahead 6 months). The daily chart below of the more “equal weighted” consumer ETF in the XRT shows a possible move back above a bullish ascending triangle. These types of situations can be powerful if a failed breakout gets bears excited but reclaims the pivot level again in quick fashion thrusting back above. We have been vocal about the MONTHLY charts too whether it be the cup with handle or the bull flag scenario, with those bases taking shape after a sharp rejection at the very round par number in November 2021 with the shooting star candle. The ratio chart comparing the XRT to the XLY still shows the preference of investors wanting mega caps, except for the last 3 weeks of July with the XLY in command. Of course, the reason is the power in TSLA and AMZN. Tesla has now given investors an add-on buy point above a 350 bull flag pivot that would carry a measured move to 460 and Amazon is showing a newfound affinity for trading above the very round 200 number, a level of prior support this summer. That prior ceiling is likely now a floor and Tuesday’s bullish engulfing candle heightens the bullish theme.