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One of the more noteworthy developments in recent days has been the move in industrials. The sector has been on fire since late 2016 boosted by strong corporate earnings, expectations of a U.S. tax code overhaul and improving global economic conditions. The Industrial Select Sector SPDR ETF (XLI) rose 0.47 percent Monday, bringing its YTD gains up to 13.80 percent, slightly underperformed the S&P. Now the question is whether Monday’s rally is a beginning of a new upswing or it’s a dead cat bounce? Below is an update look at a trade in XLI.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.

Chart 1.1 – Industrial Select Sector SPDR ETF (daily)

Our “U.S. Market Trading Map” painted XLI bar in green (buy). After a strong run of outperformance since early September, XLI peaked in late October and rolled over. The correction found support near the 100-period moving averages. Monday’s bullish reversal bar suggested that XLI might have switched to a new upswing…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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