Industrial Instability:
The industrials have been a tough place to be. In December the XLI slumped 8% recording a bearish engulfing candle after hitting all-time highs, giving back all of the prior months election frenzied gains. This is not necessarily a bad thing as one can see the other 2 worst months in the last 5 years (June and September 2022) witnessed big advances the very next month. The most recent one comes from an elevated PRICE standpoint compared to the other two, but if we look at some of the top 10 holdings in the fund more than half of the trade more than 10% from their most recent 52-week highs. Some of the better-looking charts however, include HON which we profiled here in our 12/11 Industrial Note. UBER is starting to behave itself and it successfully retested the bullish island reversal with the gap up from 8/6. A bullish morning star was completed on 12/17 (doji candle on 12/16 was a good indication selling pressure was abating), and then it broke ABOVE a bear flag on 1/2. Another name that looks like it is coming into a possible entry is DE. It is nearing a retest of a prior double-bottom breakout.