One Sector Ready To Play Catch Up To The Rally
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– ETF Watchlist –
As far as bull markets go, the entering of this one has come with somewhat of a tame response by the market overall. Most of what has pushed this market higher has remained the tech and consumer discretionary sectors with the rest lagging behind in what we would argue a meaningful way.
If there was to be another leg up to this thing we would want to see it happen relatively soon will much more of a broader response. If we do not get it, we may be entering a zone where we could see prices consolidate for a bit before making another move in either direction.
Until we get that broad market participation, this rally seems to be very dependent on what the tech/communication services side of the market do. If those sectors were to trip up along the way, expect the market to follow their lead.
Financial Select Sector SPDR ETF (XLF)
For that reason, we are going to watch a sector that could be looking to participate in this bull market, financials. As a matter of fact, we are right at a major resistance level on the XLF. If the price can move through 33.5 then we should have clear skies above for the sector to catch up to the leaders of the pack.
This price being so close, we will want to pay close attention to a few things. One, the overall trend in the market, any news regarding the sector itself, and finally, if we have any rejections or pull backs in this sector or in the market as a whole.
Remember, just because we have officially entered a bull market, does not mean the market can’t take some gains or even reverse course a bit. Also, important to remember, consolidation is a real thing that could take hold after such an impressive move. Be aware of what’s going on around you to make the highest probability trade as possible.
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