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The good news is that it looks like we are getting some light consolidation to start the holiday-shortened week, which is likely to help the bulls after the sharp reversal higher last week. As has been the case over the past several months, we get a false breakdown after some weak price action and negative sentiment, see a quick move higher, but then fail to see a sustained breakout. Perhaps this time will be different. Either way, some sideways action and an overall benign tape is fine by me at this point, as I am looking for charts to firm up even more before getting more involved with trades.
The bad news is that today is a rather boring session. As you can see below on the 5-minute chart of the SPY, all we have done since this morning’s open higher is essentially make lower highs with higher lows to consolidate sideways.
As an aside, to follow-up on my post last evening about the insurance stocks looking better, I believe VRSK is a name to keep on watch above $40.
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We have an hourly bearish ascending wedge in XLY . And that sector is probably the most vulnerable to any further news driven spikes in Oil.
If oil rockets above 130, I cannot see a bottom for XRT or XLY . Wouldn’t even try to catch that knife