From the desk of Steve Strazza @Sstrazza
Our Top 10 Charts Report was just published.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Industrials Are Island Hopping
his is a zoomed-in look at the trailing month and a half of price action in the Sector SPDR Industrials ETF XLI. Industrials have the tightest historic correlation to the major averages in the US, so the index provides valuable information for the overall equity market.
Industrials just printed a failed reversal pattern, making for an excellent illustration of the choppy and trendless environment we’re in.
Earlier in the month, XLI launched higher from an island reversal formation. However, there was no follow through and the move immediately stalled. Friday, prices gapped right back into their old range, forming yet another island reversal.
We’re watching the pivot lows around 82.75. If we take those out, we’re likely to get a fresh leg to the downside. This is not just true for Industrials, but the broader market.
