David Versus Goliath:
It seems like market participants are still favoring mega-cap consumer names over smaller ones. At least if you are looking at the ratio chart of the XLY over the XRT. At the bottom of the daily chart below the break above a cup base pattern is holding and it is slightly inclining since the move in early September. This is in large part due to the nice 1-2 combo of the top-heavy holdings in TSLA and AMZN in the XLY. The former has been a volatile one and is now looking to recapture that break above the 260 bullish inverse head and shoulders pivot from the week ending 10/25 that rocketed higher by 22% in a base 13 months long. In my opinion, it must reclaim the 260 pivot in the next week or two as the best breakouts tend to work right away. AMZN we have spoken of too and it is now less than 1% away from the very round 200 number and is still above the MONTHLY 188.41 cup base pivot taken out in June and this carries a measured move to 280. This is nowhere near overbought if you look to the RSI between 2015-20 being above 70 for a good chunk of that time. Let’s not forget that the AMZN of South America in MELI, it REPORTS Wednesday after the CLOSE and it to looks like it is putting the very round 2000 number behind it with 3 consecutive CLOSES above the figure (although September was a doji), a level of resistance during 2021. Former resistance is now support.