The Key Technical Level Investors Are Still Watching (XLE, XLI, XLB)
Since the S&P500 definitively broke support in the 1,250′s in early August of 2011 every rally approaching that key level has been repelled, often violently. The result was the choppy, brutal, ugly and ultimately pointless gyrations resulting in a lost year for stocks.
After the bullish rush of early 2012, here we are again, attempting to stay above 1,260 and stay there. J.C. Parets, founder of AllStarCharts.com, isn’t so sure this time is any different. Describing the aforementioned breakdown of last summer as “devastating for U.S. equities,” Parets is taking a “show-me” approach to the tape, looking for a consolidation of the December and early January gains, for starters.
And what he really wants to see is sector rotation. The broader tape isn’t going to make any substantive progress unless the “risk-on” sectors start leading the way higher. Energy (NYSEArca:XLE), Industrials (NYSEArca:XLI), and the Basic materials (NYSEArca:XLB) that typically move higher in robust economic times need to show some positive price action for Parets to embrace a breakout.
The Euro’s Demise Has Been Set in Motion: Are you protected?
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
CLICK HERE to get your Free E-Book, “Why It’s Curtains for the Euro”
See the full “Breakout” segment below:
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