One of the more noteworthy developments in recent days has been the move in Consumer Discretionary. The Consumer Discretionary Select Sector SPDR ETF (XLY) has been trailing the S&P, down 0.4 percent for the week. Now the question is whether this is a pause that refreshes or it’s a beginning of something worse? In fact, according to our “U.S. Market Trading Map”, this week’s lagging trading actions indicated an impending bearish trend reversal. Below is an update look at a trade in the 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. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – Consumer Discretionary Select Sector SPDR ETF (daily)
Our “U.S. Market Trading Map” painted XLY bars in red (sell). After a strong run of outperformance since early 2017, XLY peaked in late July at 92.55. The ETF rolled over and printed a bearish series of lower lows and lower highs trading pattern. The September’s rally ran into resistance just below 92. This week’s downside follow-through confirmed…Click here to read more.
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