Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Gold Stocks Investment Wanes - 20th Jul 18
Diversifying Your Stock Investing Strategies is Smart Investing - 20th Jul 18
Custom Global Stock Market Indexes May Be Sounding Alarms - 20th Jul 18
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Retail Industry Index Providing The Next Stocks Long

Companies / Retail Sector Nov 28, 2017 - 01:28 PM GMT

By: ElliottWave-Forecast

Companies

The S&P Retail Industry Index comprises stocks in the S&P Total Market Index that are classified in the GICS retail sub-industry. For this article we’ll be using The SPDR S&P Retail ETF (XRT) which tracks an equal-weighted index of stocks in the US retail industry and correspond generally to the total return performance of the S&P Retail Select Industry Index.

The performance of XRT is significantly correlated to the prevailing level of consumer confidence in the economy because the ETF represent the companies whose main business is selling retail merchandise to consumers like WalMart , Groupon, American Eagle, ect.


XRT Sectors and Holdings

To understand the current situation for the Index we need to take a look at the bigger picture since the recent recession after the 2008 Crash :

Retail Industry Index ETF ‘XRT’ Weekly Chart

The ETF Rallied strongly from it’s 2008 low showing an impulsive 5 waves advance that ended at 2015 pea. Since then, the Index started wasn’t able to rally to new highs similar to the majority of sectors in the stock market.

XRT currently is still correcting the cycle from 2008 low and looking to do a double three structure toward 100% – 123.6% Fibonacci extension area 34 – 31 where it can find buyers for a move to new highs or at least 3 waves bounce.

How can we use the weakness in the retail index to our favor ?

The world financial  market is all correlated together and every instrument is related to each other in different dimension. In our next chart we can see how XRT and RUSSEL Index are sharing the same 2016 low which was a buying opportunity around the market as the majority of Indexes rallied to new highs from.

The rally around the world is still in progress almost for 2 years now while the retail industry index remained in a sideways range during that time. As the instrument has a corrective structure taking place then we can use the extreme area to know where the next buying opportunity will take place.

Russel (RUT) VS Retail Industry Index (XRT)

The rally in the stock market is far from ending but correction do take place, that why we use different tools like distribution system , pivots , cycles and correlation to help us identify the right time to switch and look for the next opportunity.

Some of clearest instruments that guide investors around the market in these conditions is the clear structure in Apple (AAPL) and NASDAQ (NQ_F) as both are leading the move to the upside. However as the market is bullish it’s always the wrong call to call a top against the trend as extension can always accrue in the strongest instruments, therefore it’s better to use a weak element in the market like XRT to identify where the bounce can fail and combined with the rest of tools to get a perfect match.

Retail Industry Index ETF ‘XRT’ Weekly Chart

The retail industry ETF ‘XRT’ is currently showing an incomplete 5 swings bearish sequence from 2015, which is part of 7 swings corrective structure and consequently we expect the ETF to keep fail lower as long as the pivot at December 20016 peak (48.3) is holding.

The current 3 waves bounce in XRT is looking to reach extreme area 42.95 – 45.59 where we expect sellers to appear, therefore around that area the stock market would find a short term peak and start at least a 3 waves correction to the downside.

Recap

The majority of retail traders are trying to Time the Peak in Stock Market to get in short side while the big players are looking for the next pullback to take place so they can add more Longs. Using an ETF like XRT to trade to short side and hedge your portfolio during market correction is a far better trade then trying to short Apple or Nasdaq.

If you’re interested in getting more insights about buying opportunities in the Stock Market then take this opportunity and try our services 14 days to learn how to trade Stocks and ETFs using our blue boxes and the 3, 7 or 11 swings sequence. You will get access to our 78 instruments updated in 4 different time frames, Live Trading & Analysis Session done by our Expert Analysts every day, 24-hour chat room support and much more.

By Ayoub Ben Rejeb

https://elliottwave-forecast.com

ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 52 instruments including Forex majors & crosses, Commodities and a number of Equity Indices from around the World. Our clients also have immediate access to our proprietary Actionable Trade Setups, Market Overview, 1 Hour, 4 Hour, Daily & Weekly Wave Counts. Weekend Webinar, Live Screen Sharing Sessions, Daily Technical Videos, Elliott Wave Setup .

Copyright © 2017 ElliottWave-Forecast - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules