The following Daily chart of the Homebuilders Sector (XHB) shows, that it reached a new 3-year high today (Wednesday), but not a new closing high. However, the RSI, MACD and Stochastics indicators are not yet confirming a move higher. Note the high volume activity since the beginning of this year...signalling major rotation in and out of this sector, perhaps, in readiness for a big move one way or the other.
When compared with the Financials Sector (XLF), the following Daily ratio chart of XHB:XLF shows that the XHB weakened from the beginning of 2013 until mid-October 2014, while XLF outperformed. At the moment, price has bumped up against major resistance at 1.50 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 1.40/38 level before the next major move is established.
When compared with the S&P 500 Index ($SPX), the following Daily ratio chart of XHB:$SPX shows that the XHB weakened from mid-2013 until mid-October 2014, while the $SPX outperformed. At the moment, price has bumped up against major resistance at 0.0175 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 0.0165/60 level before the next major move is established.
Since the "continued recovery" in the U.S. is seen to be dependent, in part, on strong homebuilding activity, it may be worth measuring its "strength" against the above sector and index over the near and longer terms...I wouldn't be surprised to see some weakness of the XHB against these in the short term.
Welcome and thank you for visiting!
The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex
DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
please read my full Disclaimer at this link.
UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Tues. Dec. 12 ~ 2-day FOMC Meeting Begins
* Wed. Dec. 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
* Mon. Dec. 25 ~ U.S. Markets closed for Christmas Day holiday
* Mon. Jan. 1 ~ U.S. Markets closed for New Year's Day holiday
* Wed. Jan 3 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Fri. Jan. 5 @ 8:30 am ET ~ Employment Data
* Wed. Jan. 17 @ 2:00 pm ET ~ Beige Book Report
* Wed. Jan. 31 @ 2:00 pm ET ~ FOMC Announcement
*** Click here for link to Economic Calendars for all upcoming events