Don't Ignore This Chart!

Can You Win With Defence? What The Money Is Saying


The Brexit vote made large 5% swings in the market both ways this week. What could possibly be next? 

After a major market event, watching the rotation of money into the various sectors can help us understand where investors are getting positioned. Rolling through the charts, the XLP had a huge breakout above 3-month resistance today.

A brief review of the chart shows that the Staples sector has been working its way higher since the August lows of last summer. The MACD is positive and on a buy signal, the volume accelerated this week, the $SPX Relative Strength made new news and the SCTR jumped back up to 86. This is very bullish for defensive names and concerning for offensive growth sectors. To add to the signals from the market, Utilities also soared today and all week. 

Both of these charts continue to be go-to sectors. Investors may want to follow their favorite growth stock, but these charts are suggesting a lot of positioning in the defensive areas instead.

You may also enjoy taking a look at the Webinar for the Commodities Countdown 2016-06-30. Commodities were the best performing area of the market in 2016. The webinar shows some nice changes this week and other methods to invest in the global markets. Commodities Countdown 2016-06-30. Click on the Yes button below each blog to get it delivered direct to your email.

Good trading and enjoy the long weekend,
Greg Schnell, CMT,  MFTA.

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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