Today Caterpillar reported great earnings with almost $1 Billion beat on revenues. Huge. But the CFO mentioned that they are wondering if this might mark peak earnings for the cycle. Whoops!
The corresponding move in other Industrial stocks was swift. Deere and Co, Cummins, the XLI SPDR Industrial ETF; and Finning - Caterpillars largest dealer are shown.
What makes this more important, is the XLI. The XLI is sitting on the 200 DMA average and near 5 month lows. All this makes the market direction way more difficult. Trade cautiously.
Greg Schnell, CMT, MFTA.
About the author:Greg Schnell, CMT, is a Senior Technical Analyst at StockCharts.com 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).