A week ago, I pointed out that the XLF, IWM, and IYT were not validating the SPX’s breakout above 1130, and they still aren’t. In addition to those three laggards is the XLE. If the global economy were on fire, surely the energy stocks would be breaking out, right?
Nevertheless, IWM, IYT, and XLE are all within one day’s march of victory. So, bears should bear (ha, ha) that in mind. Volume on Monday was light, so the selling was not serious.
Both the IWM and IYT are “crawling along” their resistance levels, and that is usually a bullish indication because it shows a relentless eroding of the barrier. The IWM also did not make a lower intra-day low in Monday’s whoosh down into the bell.
The XLE doesn’t look terribly perky, but it did rally on strong volume Friday, and consolidated on light volume Monday, so that’s a bullish posture.
The XLF is the train-wreck of the group. Its rally volume on Friday was ho-hum, and it would probably need two strong days to take out $15.09. Morgan Stanly’s hiring freeze isn’t helping matters.