XLV breakout? Watch retest, quite possibly a fakeout.

Healthcare is mirroring 2015-2016's triangle breakout pattern here with an obvious move above the trendline. LOTS of people see this, and there are many people viewing this as a repeat of the post 2015 rebound. I'm not totally sold on that scenario however. 2015-2016's healthcare consolidation saw a lot of frauds busted and companies deflated. Currently, we do not really have that environment to rebound from aside from the pharma companies who are going to be taking hits for opioid litigation, and we're facing some major political headwinds. While I can see some recovery from opioid settlements, I don't think we're past that as a risk quite yet, and we're coming to face other risks from the political process.

With that said, I DO like healthcare. It tends to be less cyclical than other sectors, and unlike utilities & reit's, this defensive sector isn't going to kill you if we see a return to inflation / reflation at any point.

Watch the breakout for a retest, and keep an eye on what it does. Markets love to fake people out, especially when everyone and their mother is seeing a repeat of previous patterns in play.

Comment:

Coming up on test of whether this is a true longer-term break or not. With that said, we had a nice extended breakout, but that doesn't preclude it from being a long-term false breakout before heading lower.