The consumer discretionary sector stocks followed through last week, exhibiting relative strength. S&P 500 closed higher, led by XLY, XLE, XBI, XLV, and IBB.
Summary
This is week 15 of the bullish reversal that started on December 26. Most sectors are working hard and show signs institutions were positioning in several notable sectors in the new quarter.
Institutions gave fair warning back in August, two full months “before” the FED announced its hawkish tone. Had traders watched this one ratio, in addition to Junk bonds, and other risk-off assets, the inevitable fallout could have been avoided.
Now we see the opposite, institutions have been buying economically sensitive cyclical or consumer discretionary stocks. Better than expected jobs numbers should have a positive effect on these candidates.
Consumer Discretionary Sector
The consumer discretionary reached new heights last week, closing at the top of its range. The lower Bollinger band turned as well, signaling a potential grind as prices stay bullish inside standard deviation one and two Bollinger bands.
MACD is above its signal line and rising. Histogram produced a taller bar last week,
Consumer Discretionary – Auto Parts Group
This group has been on fire, as the job market firms and fewer unemployed workers confirmed in Friday’s jobs numbers. Have a job? Buy a new car or fix your existing vehicle.
MarketSmith Industry Group – Auto Parts Suppliers
S&P Futures are lower, testing earlier levels.
The watchlist is populated with a few of these stocks. Also watch restaurants, bars, clothing, personal electronics, autos, auto parts, and home builders, among others.
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Happy Trading,
Vinny
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.
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