This is a big week for data concerning the consumer.
PCE inflation price data is coming out Friday. Tariffs remain a political football. And the Fed did not lower rates.
And, from a technical standpoint, the Retail Sector ETF (NYSEARCA: XRT) has the most to gain and to lose.
On the “daily” chart, while the Retail Sector (XRT) plays catchup to the S&P 500 (SPY), it has yet to outperform since, well, for a very long time.
The phase after the death cross, is bearish.
XRT is well below the January calendar range low, even on this bounce.
And the real motion momentum shows a mean reversion, but momentum still quite weak.
On the “weekly” chart, the best we can say is that Monday’s action is still within the range of the huge sell off 2 weeks ago.
A move above 71.42 would reverse that week’s damage.
Momentum remains better on the weekly timeframe, but marginally.
And even if XRT clears that bearish bar, it still must get back over the green moving average or the 200-WMA
On the monthly chart…
With 5 trading days left for March and the 1st quarter, the current price trades under the 23-month moving average.
Why is this significant?
Should XRT struggle to close out the month back above the blue line, it will indicate the consumer and consumer spending is in a 2-year business cycle contraction.
And that is after XRT has seen expansion since December 2023.
If XRT cannot hold here, after 2 and ½ years of consumer confidence and optimism, it will be quite clear that has changed.
Of course, with 5 days left, we can be hopeful…
For now, hopeful means patience.
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.
