Consumer Group Strength Broadening:
The XRT, the more diverse consumer discretionary ETF, is signaling good things for the group. Below is the MONTHLY chart which shows this could be ready for a beach ball held underwater breakout. It would have to climb above the round 80 figure first but if that occurs look for this fund to target the very round par number by the end of 2024. It shied away from that level in late 2021, which was the start of an ugly 8-month losing stream that found a floor in the 55 area which it held during 2022 and 2023. When compared to the top-heavy XLY on a ratio chart the XRT recorded a nice last 3 weeks of July and is now bull flagging for a possible continuation move higher. This to me speaks volumes as money may have been rotated out of the AMZN’s and TSLA’s and into the smaller names as the group’s ascent spreads its tentacles wide (not saying TSLA and AMZN will not power higher from here). Its daily chart could hit a roadblock as it travels toward the 79-80 area for the sixth time in 6 months, or is that too obvious to occur again? The fund did complete the bullish island reversal on 8/15 (after the gap down on 8/2) and this coiling action could be ready for a charge higher.