XLP Consumer Staples Daily Chart Upward-Sloping Channel Rising Wedge Overbot Negative Divergence Price Extended Above 200 MA

In normal markets over the last decades, when the business cycle runs its course and recession is on tap, traders seek the safety of consumer staples since these stocks tend to get hit less hard than the broader market. After all, who can do without soap, shampoo, toilet paper, detergent and toothpaste? That is why they are staples. However, these are not your Grandfather's markets. The Fed and other central bankers have distorted all price and asset relationships. A market rally should continue higher with tech and small caps leading, instead, the central banker easy money is pumping markets higher on the backs of dividend stocks, consumer staples, utilities, healthcare and other perceived safe havens. Staples are up 135% in four years and 19% in only the last 14 weeks, moving up at a phenomenal 1.3% per week into bubble territory. Note the elevated price above the 200-day MA (green dots) indicating an over extended market.

The red rising wedge, overbot conditions and negative divergence wants a pull back but short term momo will likely print some matching or higher highs as the central bankers keep forcing equities higher. Projection is a flatish move and roll over moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.