4 Apr 2024

Consumer Sector Review: 4/5/24

By |2024-04-04T16:23:22-04:00Thursday|

No One Talking About It:   As this week comes to a conclusion, the XRT is down 6% this week so far, and if that holds it would be its worst WEEKLY showing in 13 months. The WEEKLY chart shows an ugly bearish engulfing candle heading into Friday, and perhaps a retest of the ascending triangle breakout near 72.50 is in store. It is a broader retail ETF than the top-heavy XLY, which was cruising, but the AMZN bearish dark cloud cover candle today after it registered 3 consecutive doji candles between 3/27-4/1 makes this fund fell ready for lower PRICES. The top 2 holdings in the XRT in GPS and GES both represent just 1.7% of the fund and the former is lower 8 of the last 9 sessions, and the bull flag that looked in place may now turn out to be some back and filling into the cup base breakout pivot of 22.02. The weakness in the XRT should be looked as meaningfully as it represents a large swath of the consumer group. Maybe chatter will start to heat up that AMZN is just too dominant eating market share among its smaller peers in the sector.

3 Apr 2024

Consumer Sector Review: 4/4/24

By |2024-04-03T16:15:48-04:00Wednesday|

Consumer Rebellion:   The XLY has been showing some signs of softness with recent sloppy earnings reactions from some former leaders. Names like PVH Tuesday in the apparel space dropped more than 22% after the day before it was acting robustly trading at 52-week highs. Perhaps it will find some comfort at the rising 200-day SMA which aligns with the very round par number in the coming days. LULU cratered 16% on 3/22 and it too may find some bids in this area as it fills in a gap from the 10/13/23 session, although it has the look of a bear flag breakdown. MELI fell by double digits on 2/23 and has now carved out a bearish head and shoulders formation with a neckline at the very round 1500 number, and it continues to be outshined by domestic peer AMZN. Looking at the chart below of the XLY it sits just 3% off its most recent 52-week highs, but it feels important that it holds today's intraday lows. On the MONTHLY chart of the XLY, notice March recorded a doji candle which often indicates at best indecision and worst a change in the prevailing direction. While not discussing AMZN or TSLA, which we have plenty the last few weeks, now HD has undercut its 50-day SMA for the first time in 5 months after a recent bull flag breakout. Is the consumer on edge?

2 Apr 2024

Materials Sector Review: 4/3/24

By |2024-04-02T16:30:21-04:00Tuesday|

Golden Contrast: I have always been a big believer that technicals and fundamentals compliment each other. The old saying goes "the fundies tell you what to buy and the technicals tell you when to buy." If we were to look at a PRICE chart comparing AEM to NEM which are in the same gold mining group we could see the stronger action for the former here. One could argue whether one has a more competent management team, or better mines, etc but PRICE is making it very clear which one should be overweight between the two. AEM on a YTD basis is now up 11% while NEM is lower by 12%. Over last one-month period, they are both seeing nice returns, but again it is AEM advancing 22% while NEM is up 14%. If we looked at them on their individual merits we would see AEM has broken above a bull flag pivot of 57 which carries a measured move to 67, but it may see some back and filling here after Tuesday's bearish dark cloud cover candle. NEM which is more than 30% from its most recent 52-week highs (AEM is just 1% off its own annual peak, not a typo) could mildly look bullish on its MONTHLY timeframe with a reclaim of the 200 MONTH SMA in March after a bounce off the round 30 number in February.

1 Apr 2024

Technology Sector Review: 4/2/24

By |2024-04-01T17:56:46-04:00Monday|

Semis On Edge? The group within the diverse technology space has been a bastion of strength, while others struggle. Looking at the SOXX on a YTD basis it is higher by 19%, thrashing the 5% advance of the IGV. If the semis falter it could weigh on the overall sector. Here we can see how over the last 4 weeks (20 sessions) the XLK has been lagging, the worst actor of 11 and look at the defensive areas taking the lead in energy. utilities and materials. Peering at some of the more influential names in the space would reveal some bearish candlestick patterns have taken hold for the brave shorts to play against. AVGO, the second largest holding in the SOXX, recorded a bearish evening star on 3/5 (with a doji candle in the middle session). Fellow top ten holding in LRCX has seen trouble at the very round 1000 number with a bearish shooting star and gravestone doji candle there on 3/7 and 3/21 respectively. Other prominent names in the arena include MPWR, which registered a failed bull flag breakout, and now sports a bear flag. It is unclear if semis take a well-deserved breather that software may be able to take the baton as seen here on the ratio chart. Tech feels heavy and the semis may make that feeling more pronounced in the near term.

27 Mar 2024

Consumer Sector Review: 3/28/24

By |2024-03-27T16:18:57-04:00Wednesday|

David Vs. Goliath:    Inside the vast consumer discretionary space, there are two dominant ETFs. One is the XLY which is very top-heavy and reliant upon AMZN and TSLA (the former is looking to surpass GOOGL as the 5th largest company on the planet and exceed $2T). Amazon has been reluctant to give up any ground at the 180 number which was a bearish gravestone doji candle from 3/4 (3 of the last 4 sessions were above 180 intraday but zero CLOSED above it). It has been displaying bearish RSI divergence since February. TSLA continues to swim below its 50 and 200-day SMAs since 1/11 and is the primary reason why the XLY is underperforming the XRT. The chart below of the XRT shows it honing in on another bull flag base as the top 3 holding in GPS DKS and GES all acting very confidently and each representing less than 2% of the fund. On a YTD basis, the XRT is higher by 8% while the XLY has risen "just" 3%. Concerning how the XRT will act against the XLY will likely be determined by TSLA, and today it did recapture its 21-day EMA and may go on to fill in the upside gap from the session, but there it will have to contend with the downward-sloping 200-day SMA.