Here's the industrial sector being strong then ever, 11th straight green weekly candle. Last week's candle made a strong push and close above the 1.618 Fibonacci level. This is some market we've been having. What do you guys think here? Think this market can take us to the next Fib level? IDK but we shall see.
To Recap:
In parts one and two we used MACD monthly perspective momentum across a large number of tradable assets to produce a matrix of tradable assets, and then to distill an overview of each category's momentum state.
The raw data is placed in the quadrant most consistent with the combination of the MACD momentum state and its price trend.
The raw data...
XLI Breakout with $130 Target
XLI tends to have big sloppy consolidation trends over 3 year periods
Then it breaks out for 20 point moves higher
XLI recently broke out above $111 August highs, retested, and continued higher
Chart has ridden 9dma higher since early Nov
RSI stretched short term
Would like to see consolidation here at highs before next leg...
Last year I produced several posts that described an exercise that utilizes long term momentum changes between asset classes and the relationship among asset classes to anticipate the business cycle. That series and part 1 of this series are linked below.
Methodology: Individual markets and ratios are plotted in the quadrant that best describes their...
Last year I produced several posts that described a methodology utilizing long term momentum changes between asset classes and the relationship among asset classes to help anticipate the business cycle. That series is linked below.
When I worked in the institutional setting I would place hundreds of assets, ratios, spreads of individual corporate bonds and...
XLI has had a picture perfect breakdown.
We warned our members of this last week.
this pattern technically has more downside but it is very oversold and were approaching the breakout trend line as well as many weeks of consolidation & support.
A bounce is most likely as the daily chart is becoming exhausted to the downside.
A close above the neckline negates the bearish pattern.
If Weak ISM data continues you could see more weakness in this sector.
A pair trade I'm watching is Long GE / Short XLI
Fundamental Analysis
While macro headwinds remain strong putting pressure on "infrastructure stocks," most traders are sitting short or flat "economy" based stocks. Any upside surprises will cause them to play catch up on the trade.
Strong run up in other sectors, especially Tech, will cause some rebalancing flows out of Tech (and probably stocks in general)...
Technical analysis of XLI (Industrial Select Sector SPDR Fund):
XLI is an exchange-traded fund (ETF) that seeks to provide investment results that correspond to the performance of the Industrial Select Sector Index. The ETF's holdings primarily include industrial conglomerates, aerospace, and defense companies.
From a technical perspective, XLI has been trading...
I noted a while back the bullish look for industrials, despite bearish sentiment in other sectors. XLI began its current bull trend at an intermediate bottom on 9/26/22, and really started a strong uptrend on 11/14/22. It sits well above the cloud on the weekly. XLI is poised to overtake it's 52 week high at 105.23 in the near future. From there, we can look at a...
61.8 % retrace and a successful Gartley reversal retest. Keep on watch for further upside. Along with SOX and XLF, these are green shoots that may lead SPY.
There is a Logscale AB=CD on the Industrials with Bearish RSI Divergence and the 1.414 PCZ of the Logscale AB=CD aligns with the 1.618 on the Linear Scale. I think it would be fitting to see this go down as i have recently become Bearish on Defesne Stocks such as RTX and HON, and have also become bearish on Airline Stocks such as BA and those stocks all happen to...
