I have been very clear about waiting for the “inside” sectors to reconcile their trading ranges before loading up on new equity positions.
I have been equally clear on investing in hard assets, especially now as we have even more reasons to believe that prices of necessities are not going lower anytime soon.
So, in the spirit of hump day, I would like to examine the retail sector through the lens of our Granny, XRT.
After all, between strikes, weather, debt, geopolitics, spending and easier monetary policy-it’s her-the consumer who will tell us what’s up.
How perfect that on hump day Granny sits on the hump or smack dab in the middle of the high and wide channel I wrote about last week.
If we call 80.00 the high of the channel and 70 the low of the channel, what does that make 75?
Not only is 75 the midway point, but it is also the price of the key 50-day moving average. (give or take).
XRT underperforms SPY.
Real Motion is in a bearish divergence with the red dots below the 50 and 200 DMAs.
The takeaway for hump day?
Wait until we see more evidence of the next direction.
Will Granny just sit atop the hump of the camel and hold?
Will she test the lower regions of the channel support?
Or will she rise to the occasion and take out the recent resistance?
You will know soon enough.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
