Stocks logged gains across the board Tuesday, erasing most of their losses from the previous day’s selloff, as a batch of better-than-expected economic reports trumped worries over a credit crunch in China.
Consumer confidence surged to its highest level since January 2008, according to the Conference Board. And durable goods orders rose 3.6 percent in May, according to the Commerce Department, topping expectations for a 3 percent gain. As the result, the Consumer Discret Select Sector SPDR (XLY) advanced 0.90% to 55.03. Technically speaking, it’s a good sign for the overall market whenever cyclical and higher-growth stocks start leading. Below is an updated look at a trade in XLY.
The graphic below is from our “U.S. Market ETF Trading Map”, which show the near-term technical bias and trading ranges for XLY. 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 Discret Select Sector SPDR (daily)
As indicated in the above chart, our “U.S. Market ETF Trading Map” rates XLY as a Hold. XLY rebounded nicely off support at the bottom of its short-term trading range. That level roughly corresponds with the lower edge of the May falling trend channel. Money Flow measure trended higher from below the zero line, indicating selling pressure had eased…Click here to read more.
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