XLY - Bullish US Consumer DiscretionaryYet another bullish take on a US sector but this time I have included a bearish alternative in the red count. I prefer the blue count.
XLY trade ideas
Signs of Caution from Consumer ETFsConsumer Staples (usually a defensive investment) are taking precedence over Consumer Discretionary (usually aggressive posture, when all is well) in October. We are pressing lower and showing the largest drop in a while. This is potentially a leading indicator of some kind of slowdown coming.
XLY Broke the Short and Intermediate momentum trends this weekXLY is still in the bullish phase but momentum s are broken. XLY looked above this week for OCT and gave it all back. Buyers out right shut down this Month so far.
XLY Elliott Wave View: Trading At Equal Legs ExtremeXLY ended the cycle from 08/02 low (109.99) at the peak of 09/20 at 118.23 in blue wave (3).
Below from there, the ETF has been correcting that cycle in the sequences of 3-7 or 11 swings.
From 09/20 peak XLY has reached the equal legs area towards 115.55-114.95. The internals of that pullback has been unfolding as an Elliott Wave A-B-C correction. The first leg lower ended red wave A at 09/24 low (115.72). Above from there, it ended red wave B pullback at 10/01 peak (118.14).
The internals of that pullback unfolded as an Elliott Wave Double correction which ended black wave ((w)) at 09/26 peak (117.76), black wave ((x)) pullback at 09/26 low (116.65) and finally black wave ((y)) of red wave B at 10/01 peak (118.14). Below from there, it reached the mentioned equal legs area (blue box) and it should see soon a bounce higher.
Currently, it is trading at the equal legs extreme area (blue box) of red A-B and soon it should end blue wave (4). Afterwards, the ETF is expected to find buyers looking for new highs or for 3 wave bounce at least as long as pivot at 113.98 stays intact.
$XLY Bearish Credit SpreadXLY Bearish Credit Spread - Opened. XLY leaning very bearish this morning (Monday) with a possible movement to test the 115 area as expected.
Entry 116.11.
Break Even 116.68.
1.7:1 r/r
Even with the heightened volatility this week, we will let this spread expire as it has a defined risk and reward.
General Market OverviewThis video is the first of many, and I discuss the behaviors of the sectors and potential markets that are poised to trend in the near future. The "freshest" sectors quietly trying to start a new trend are the Industrial and Consumer Discretionary Sectors. The sectors (along with their industries) I think should be on every trend follower's radar are:
XLF - Financials Sector (including some real estate stocks): setting up to break out of its 5 month range; main movers are the bank industry (not the Goldman Sachs and Morgan Stanley kind of banks)
XLI - Industrials Sector: breaking out today with the possible trend beginning here in an unpopular sector; main movers are the service industries
XLK - Technology Sector: obvious uptrend that should be followed with caution, but is getting ready to continue; main movers are the software and IT services & consulting industries
XLP - Consumer Staples Sector: in early stages on uptrend with possible correction or continuation in the near future; moved by multiple industries
XLRE - Real Estate Sector: also in the early stages of possible uptrend; main movers of sub-sector have been REITs
XLU - Utilities Sector: also in the early stages of possible uptrend; main movers are electric utilities industry
XLV - Health Care Sector: uptrend already in motion with test of all-time highs today, with great potential for trend continuation; main movers are medical equipment and managed health care industries
XLY - Consumer Discretionary Sector: breaking out today with the possible trend beginning here in a sector where the media does not favor much; main movers are the apparel, discount, footwear and auto industries (mostly retail)
I am going to do more videos on how I diversify my portfolio, and how to create such a portfolio according to what is moving in the whole market so it would be great to get feedback from this video that I can include in those, and also ideas on material you would like to see more of!
Thanks, enjoy.
Risk on/Risk off, XLY:XLP ratios, THE Real money flow indicator.Was recently shown this little gem of a ratio chart that will help gauge strength to certain markets such as the stocks and other financial instruments as the S&P, Dow Jones etc
So what does it all mean??
The ratio of two diametrically opposed asset classes often provides insightful clues about what investors are doing.
The XLY:XLP ratio is a perfect example. Its not a hypothetical as it uses real money data based on what investors are DOING and NOT what they maybe thinking or projecting...
XLY represents the Consumer Discretionary Select Sector SPDR ETF.
XLP represents the Consumer Staples Select Sector SPDR ETF.
XLY is the ETF which tracks the consumer
discretionary sector XLY’s top 5 holdings are...
Comcast (CMCSK),
Walt Disney (DIS),
Amazon.com (AMZN),
Home Depot (HD),
McDonald’s (MCD).
XLP tracks the consumer staples sector, with
top holdings of...
Procter & Gamble (PG),
Coca-Cola (KO),
Philip Morris (PM),
Wal-Mart (WMT),
CVS Caremark (CVS).
So how does this affect markets?
When the chart value rises its a clear indicator that people are happy to spend freely and without caution, investors will look to increase risk, where as if the value starts to go down and decline, people are spending more on everyday essential items and thus stock markets are in shrinkage, decline and investors are taking LESS risk.
we can clearly see how this chart reflects current highs on the stock indices if we compare to the current S&P500, Russel, Dow Jones and so on
If this article has helped or you have any further questions, please leave them in the comments below.....
XLY - shortApprox 32% of XLY is tow stocks AMZN (24%+) and HomeDepot (7%+).
Given AMZN has been a skyrocket (about to run out of rocket fuel) and US housing looking like it might be about to hit the rails (bad for HD) and what looks like to be a completed Ewave count I am shorting XLY 111.50 with stop 113.50 and a target of at least 10% lower (5/1 return/risk) in coming weeks.
Long XLYLong XLY over 105 into HD earnings next week. On trend line edge looking for upside to 106 then 107. Bollinger bands suggest an increase in volatility soon as they tighten.
Ofensive Sector vs Defensive Sector on SPXOfensive Sector (Tech + Discretionary) vs Defensive Sector (Utils + Staples) on SPX index.
Investors are officially not worried about the dipWell , we broke the highs in this pair. This shows that investors still think that the dip was as its called , a dip. I will be watching the first zone demarcated by the rectangle. That's the floor and should hold, if not , We are in for a rough ride.
Bounce Monday set upWell, at least not all sectors in out right sell mod coming into Monday. There is some hope the accelerated down trend will take a reprieve. I did for get to show XLF and XLB. They both are still lagging other indices. Bottom line XLU, XLK and XLE looking better. XLY, XLI, and XLV ugly. IWM looks best for a trend reversal Monday.
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Time for consumer discretionary to outperform? Longs look good with entry/target/stop levels shown on chart.
