[Chart Of The Week] The Impact of Amazon Not Being A Tech Stock
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Here is a chart of the Consumer Discretionary sector relative to the S&P500. Discretionaries broke out this week above a downtrend line from last year's highs. This would be awfully impressive if just taken on its own without digging a little bit deeper. You see Amazon, represents almost 11% of this entire sector and is helping to lead the charge:
Here is a chart of the S&P500 Equal Weight Consumer Discretionary ETF relative to the S&P500. This takes Amazon's 11% weighting out of the equation and makes it equivalent to every other stock in the sector. Notice the difference in performance?
Finally here is a chart of the Equal Weight Consumer Discretionary ETF failing to break out above the downtrend line from last year's highs and actually rolling over to new lows:
We want to be shorting this sector very aggressively as long as it is below the downtrend line from last year's highs. I think these stocks are heading a lot lower.
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Tags: $RCD $XLY $AMZN
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