Always consider hidden risks
SP500 Consumer Discretionary (XLY): A Toppish Sign ?
July 20  ( From Stockcharts, TradingView  )
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The Situation

​The Consumer Discretionary Sector  includes industries such as automobiles
​and ​components, consumer durables, apparel, hotels, restaurants, leisure,
​media, and retailing.

It remains as the name says it, discretionary spending for the consumer.
When we observe that sector start to underperform at the beginning of the year,
​we can ask ourselves is the whole market can keep up without taking into account
​the US Consumer which makes 70% of the whole economy.​​​

​​The Bullish Percentage of the SP500 Consumer Discretionary
​Index (DISC) compare to the SP500 Bullish Percentage Index
​​ratio can give us some good feedback about the overall
market condition.
​When we have the 7 DMA ( Day Moving Average ) on that ratio
reaching a level of 1 or over, usually we are getting into an ovebought market condition as history suggest.​​

This is one of the ​​strongest Relative Sentiment Level of the past three years as shown by the chart below.

When we get over 1 on that ratio or retrace through it, usually we have a technical correction into the Mighty SP500 Index. ( See Chart Below - Vertical Lines )


SP500 Consumer Discretionary (XLY): A Toppish Sign ? $SPY, $XLY #xly #investing #sp500

​SP500 Consumer Discretionary Bullish % Index ( Top Panel - Dots )
SP500 Index​ Bullish % Index
7 DMA ( Blue Line )