It has been two-years since the S&P 500 bottomed in October 2022 and stocks began a new bull market.
During this time, many sectors and industry groups have enjoyed tremendous uptrends while materials stocks have gone sideways.
But materials stocks are starting to look interesting...
The SPDR Materials Sector ETF $XLB is making new all-time highs:
As you can see, the prior cycle high coincides with a major Fibonacci extension level going back to the Great Financial Crisis, which adds to the significance of this breakout.
This market-capitalization weighted fund has a large exposure to Linde $LIN amongst several other bellwether materials stocks.
We want to be long XLB if it's above 93, with a target of 139.
The Materials Sector holds a lot of the same stocks as the S&P Chemicals Index:
The S&P Chemicals Index is consolidating below a major Fibonacci extension level going back to the Great Financial Crisis and we're betting it will breakout to new all-time highs like XLB.
If CEX is above 985, the path of least resistance is higher toward 1,500.
Representing over 17% of the Materials Sector, Linde $LIN has a major influence on the direction these stocks trade. The $226B British industrial gases and engineering company is making new all-time highs:
Like the XLB, Linde is in a long-term uptrend and also recently cleared a key extension level.
With no overhead supply and the stock in the early innings of a fresh leg higher, LIN is a great vehicle for adding exposure to materials.
If LIN is above 406, the path of least resistance is higher toward 628.
Another bellwether materials stock is the $70B atmospheric gases manufacturing and distribution company, Air Products & Chemicals $APD:
Air Products & Chemicals has been a leader in the Materials Sector for years and is near its highest level in history.
After several attempts to clear the 290 level, the bulls appear to be on the verge of a major resolution to a multi-year consolidation.
If APD is above 291, the path of least resistance is higher toward 448.
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