Today was a pretty spectacular day at the coal face. However in the longer picture XJO is still boxed in.
The Yearly HL is still in a downward trend on a weekly basis.
Candles
The candles tell a different story - but that hinges on how you choose to see the down move from the middle peak of the assult on 6000. If those 5 weeks or so can be seen as a down trend, then this week was a hammer, signifying a potential change of trend.
Longer term Relatives by size
Longer term Relatives by Sector
OK, this is where I bore you again.
Sector Rotation
The red and green squares highlight the sector rotation that is occurring...at least on a relative basis.
The red square highlights (generally) those sectors that have failed to make their recent relative highs.
The green square shows those sectors that are (generally) exceeding recent relative highs. So in terms of investing in individual stocks or sector related ETFs, this gives you some good leads.
In terms of XJO trading....this is the usual pattern for the "sell in May" platitude manifesting itself in the usual ways. No guarantees of course. The stocks that are rotating up are traditionally (statistically) the ones that do well in May ( or at least, less worse). Yes, although May is usually a down month, XEJ usually does well.
I told you so....
I hate it when posters say "I told you so", and I'm probably not the only one, but I beg forgiveness on this one occasion, since this is meant as an explanation of why I post these charts.....I mentioned a few weeks ago that the XEJ was "burbling along the bottom" and might start turning up. This has come to pass. Then again I cheat too, since I was expecting some seasonal strength in the XEJ. Not sure if this a cheat or "everything coming together".
Also worth noting which sectors massively outperform too...check out XGD. I think I mentioned at some point that XGD (haha, NCM) might want to take another crack at relative highs....
XHJ- golden line at the top of the peloton. This has been one hell of an outperformer, but like the rest of the pack, it has failed to reach the recent relative highs.
We were talking the unrelenting strength of the XHJ a while ago, and I posted the following monthly seasonal , and at the time I mentioned that I thought were were coming into a seasonal hiatus time...It's evident that there is a strong mult-month seasonality in the XHJ from Sep to Feb that pauses Mar/Apr. Not a good reason to kill a good trade, but you might want to rotate out of XHJ stocks if other opportunities beckon.
( An aside. As a trader I have to be careful reading this chart. Instinctively when looking at trade related charts, I think of "up and down" but this type of chart, is mostly up. The rate of increase is different. Only two months are down OK? )
How you use these charts is depends on how you trade.
Perhaps this is slightly off topic for XJO trading, and maybe not. Open to suggestions (be nice!)
For my part I had some trades in LNG and BRU lately - DTs and EOD -- double inside days were more likely to work given this backdrop. And I looked to profit take early than I might otherwise have done in an RMD DT today, a regression trade which might have bounced better in other times.
Once again, apologies for the "I told you so" and the "I did this" in the latter part of the post.
(20min delay)