Trading Strategy – Consumer Discretionary Select Sector SPDR ETF

One of the noteworthy developments in recent days has been the move in consumer discretionary.  The group was under selling pressure Tuesday as retailers sold off following the latest round of earnings, which actually came in better-than-expected.  The Consumer Discretionary Select Sector SPDR ETF (XLY) fell 0.45 percent to 104.98, bringing its MTD gains down to just 1.2 percent, underperformed the S&P.  Now the question is whether recent pullback is a pause that refreshes or it’s a beginning of something worse?  Below is an update look at a trade in XLY.

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 – Consumer Discretionary Select Sector SPDR ETF (weekly)

Our “U.S. Market Trading Map” painted XLY bars in red (sell) – see area ‘A’ in the chart.  There is a distinct possibility that a massive triangle pattern is currently setting up in the daily chart of XLY.  The April rally pushed the ETF above the 20-week moving average, clearing an important hurdle based on moving averages, and up against the March highs.  This week’s bearish reversal…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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