XLI Industrials Sector ETF Weekly and Daily Charts

GS told everyone to rotate from healthcare  utilities, and telecom into industrials, materials and financials, and traders are tripping over themselves to buy XLI, XLB and XLF, respectively. XLI outperformed Friday and yesterday up well over 0.7% intraday with traders flocking to this sector like a moth attracted to a flame.  The green circle shows the gap-up move on Friday where price jumped above the ongoing downward-sloping channel. The red lines show negative divergence remaining in place although the short term momo is definitely adding energy to price. Traders are taking the central banker easy money and pumping new asset bubbles. Since the utility, REIT, healthcare, telecom and staples bubbles are bulging, it is time to pump industrials and materials a bit higher.

The weekly chart shows negative divergence remaining in place for the new highs. Nearly all weekly sector charts have the same look, including the broad indexes as highlighted by the nasty negative divergence on the SPX weekly chart on the weekend, showing indexes and markets topping. Thus, chasing into industrials is a questionable move not only from a chart perspective but also fundamental-wise due to all the recent weak global economic data. Nonetheless, the Fed and BOJ easy money is flowing like water and all this dough sloshing around has to go somewhere.

Watch XLI closely moving forward. Since it was crowned to receive a push higher its behavior will be telling. If XLI moves up each day forward, it tells you that the central banker money printing is full steam ahead and will continue to pump markets higher. If XLI lags and the interest quickly fades, but traders realize that sectors such as utes, healthcare, staples, telecom, REIT's and high-yield instruments are bubbles, and they want to move their money elsewhere, what happens when they realize that a rotation into industrials and materials is not the place to go? 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.