The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.
The consumer discretionary stocks have quietly struggled, failing to muster much of a bounce despite quite a few names in the space being badly beaten-down.
On the weekly timeframe for the consumer discretionary ETF, note the long-running bearish RSI divergence to price at each all-time high since late-2013.
For reference, the RSI is simply the “Relative Strength Index” used to identify changes in technical momentum. Above 50 is generally considered a bullish RSI, with above 70 viewed as overbought. Trending below 50 is considered a bearish RSI pattern, with below 30 considered oversold.
Here, the RSI has been trending lower as price made fresh highs for months on end. This circumstance indicates that buyers are growing weaker with each subsequent thrust higher in price, in terms of their upside momentum.
Thus, risk still remains to the downside for the consumer discretionary stocks.
A much stronger end of the market has been the…
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