Material SectorLooks to be time for a clear bounce in the materials sector. Seems to be a lagging sector the past few years being range bound. I do think we get a test of the channel resistance.
XLB trade ideas
SPY SECTOR ROTATIONBased on what we can observe in this 4-hour chart, there is a clear rotation or reduction in gains in sectors that have generated significant profits over the past few months. This suggests that profits may be taking a breather, and capital could be shifting to other sectors or assets, possibly in anticipation of new opportunities in the coming market cycle.
Materials ETF Has Been RangeboundThe SPDR Select Sector Materials ETF has been moving sideways for months, but some traders may see potential for a breakout.
The first pattern on today’s weekly chart is the price zone around $88. XLB bounced there several times, leaving a rounded basing pattern (a low, a lower low and a higher low). Also notice how the bottom of its range was slightly above the highs of 2023. Has new support been established above old resistance?
Second, the lower end of the range is near a 50 percent retracement of its move from mid-January to early April. That may confirm a new upward trend is starting. (Remembering how it rallied after holding a 50 percent retracement in early February.)
Next, the current range is near the previous record high from January 2022. Spending so long near that high may suggest that long-term resistance is giving way.
Fourth, last week’s close decisively broke a falling trendline along the peaks of April and May.
Finally, the Federal Reserve just delivered a double-dose of dovish news: minutes from the last meeting and Chair Jerome Powell’s speech. Classic cyclicals like financials and industrials jumped to new record highs and the U.S. dollar fell. Materials could also potentially benefit from that kind of macro backdrop.
Standardized Performances for the ETF mentioned above:
SPDR Select Sector Materials ETF (XLB)
1-year: +7.49%
5-years: +57.94%
10-year: +89.39%
(As of July 31, 2024)
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XLB WEEKLY CHARTThe materials sector has actually performed extremely well. 9 straight green weekly candles and the highest weekly close in the history of the ETF. I really like this sector and some of the stocks in the top ten haven't even broke out yet. I guess my question is, was last week a strong enough breakout to take this sector higher and to the next Fibonacci level? I wish I knew the answer to my own question but we'll just have to let it play out and see.
Potential Breakout in Materials Material stocks have been stuck in a tight range since the bear market began almost two years ago. But they could be showing signs of a potential breakout.
The first pattern on today’s chart of the AMEX:XLB Materials Select Sector SPDR ETF is Friday’s last print of $86.83. It was the highest weekly close since May 2022. That may suggest that investors are getting comfortable with loftier prices.
Second, consider the price action so far in 2024. XLB retraced half its move between late October and late December. It then consolidated above its 200-day simple moving average (SMA). A single test of that SMA on February 5 was followed by a quick rebound.
Third, the 50-day SMA had a “golden cross” above the 200-day SMA in late December. That may suggest its longer-term trend is getting more bullish.
Finally, recent weeks have seen greater economic confidence. S&P Global Ratings hiked its estimate for GDP growth and the Conference Board dropped its recession call. That could be potentially positive for materials, which are typically viewed as cyclicals.
Standardized Performances for ETF mentioned above:
Materials Select Sector SPDR ETF (XLB):
1-year: -2.88%
5-years: +54.10%
10-years: +86.67%
(As of January 31, 2024)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
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Materials Sector AVWAP Squeeze PatternThe material sector may be about to break out of an AVWAP squeeze pattern. Look for a breakout above $83.50 supported by volume.
Alternatively, it might dip to $81.50 and be bought at a value after upward momentum returns.
XLB - Monthly SupportInvestors waiting for a more probable long term support zone could wait until price action retraces to the top of the channel .
This channel has kept price action in check since the early 2000/s
We only broke out of the channel when we expanded the monetary supply and lower rates to zero.
XLB tagging Intermediate SupportMaterials Sector is getting oversold on the daily chart and tagging a key daily upsloping trend line.
A technical bounce is favoured at this level, however there is a weekly support level lower that is much stronger if this were to sell off more.
This bounce may only last a few days unless the indices firm up.
XLB (Materials) DailyWe have a double bottom breakout and currently consolidating at the apex of the "W" (circles). On its way to challenging the prior pivot high at 84.04 and all time high at 85.86. From there, it's free sailing.
$SPY $ES!1 $IWM - Recession Coming Quickly.... $XLB indicatorI just made this tonight as I was going over all the sectors. AMEX:XLE is about to drop off a cliff.... RIP $OIL...... when I pulled this one... I was stunned by the massive drop off.... massive sell offs occurring right now before our eyes.... Only dumb money left in the market....Markets as a whole are overbought currently..... XLB is indicating that we are on the precipice of a major market correction within the next 4 weeks.... This is occurring just as the Treasury is about to unleash a truckload of treasuries on the market.....all I have to say is get ready.... be prepared for what is coming next....
Materials (XLB) Coming Down Very Soon, and BIGVery familiar pattern shown here. We will come down between 20 - 30% in short order. Will send out individual names that are very ripe for the short.
XLB to 71 (down 6.5%)My highest conviction idea this week is that AMEX:XLB is going to continue falling.
* February (monthly) broke above the previous month's high, but then fell.
* March, it has continued to retreat.
* It has broken down below January and December's lows, next 'target' is November's low, which is 71.27
* Quarterly chart shows a break above previous quarter's high, PLUS a retreat. This implies bearish momentum to me.
Admittedly, we are consolidating in the current zone between 75 and 78 (see daily chart). Tough to predict which way it'll break out of that.
XLB Rate of ChangeXLB is decelerating its rate of change. What does this mean for inflation and the health of the economy?
MATERIAL SECTOR Stock Chart Fibonacci Analysis 030823
1) Find a FIBO Slingshot
2) Check FIBO 61.80% level
3) Entry Point > 82.2/61.80%
XLB - Minor LowG/G trend
13/21/34 Propulsion Dots,
RAF has just fallen below extremes.
Touching Vscore support from fisrt of the year, along with first of the year VWAP.
Darvas 3.0 signal
Entry on break above Minor High @ 83.05.
Move stop to B/E @ 83.95 (50% Fibonacci)
Profit Target - $85.20.
Stop Loss @ 25% Options
Looking @ 17March23 Options 83 Calls.
Option interest is 800.
Only 39 Days until expiry, but the June Calls are 130 days out.
Sector Rotation Model in TradingviewI have decoded the following model in Tradingview
This is the sector rotation model where different sectors are stronger at different points in the economic cycle.
Here my results in Tradingview by creating this ad-hoc layout
I compare relative strengths of sectors at different points in the economic cycle with sectors which are stronger at previous economic cycle.
- dark red zone = Full Recession
- light green zone = Early Recovery
- dark green zone = Full Recovery
- light red zone = Early Recession
Example: Industrial sectors is seen strong during the early recovery. I want to see it stronger than Tech sector (which is strong during full recession, the previous economic cycle ) for confirmation of the actual early recovery cycle actually priced by investors.
Adding 200-periods and 50-periods simple moving averages (SMA) for better defining the trend.
- chart above SMA50 and SMA200 = bullish = confirmation of the economic cycle
- chart under SMA50 and SMA200 = bearish = not a confirmation of the economic cycle
- chart under SMA50 or SMA200 = neutral = uncertainty, not a confirmation of the economic cycle.
What actually Mr. Market is pricing now?
How you can see in the figure above, we have more confirmations (V symbols) at recovery cycle . No confirmation at Full Recession and one only confirmation at the early recession.
Mr. Market does not want the recession yet…
XLB: Trend Line Broke, More Room to RunAMEX:XLB
A double top played out in qtr1 and established a down trend for the next two quarters. Price action recently broke this trend line as well as the 200sma and printed not only at a recent top but also a S/R range going back into 2021. With RSI at the door of overbought territory and MACD at one of, if not the highest in recent time, upside gain (if any) will be hard to come by.
Short idea #16-Lower highs & lower lowsHey all, XLB is in a downtrend. When you know what the trend is, you play with it accordingly. I perceive XLB will be a very solid short when $SPY reaches $389, and I will be shorting XLB. I think this is a very safe short with a massive safety net & margin for error.
"oh god get me out at breakeven"names like this got crushed over past two months
if you own this ETF, or underlying components, and you had a massive drawdown
where do you start unloading inventory? because that's a good place to short.
XLB swing tradeHey all, I noticed that XLB held its most significant and clear support level today. I think it currently presents a favorable risk:reward trade.
