...where the predictive properties sectpr Power-Bar differentials suggest where they're headed next. The interest rate sensitive Utility and Real Estate sectors moved lower along with bonds last week, and Power Bar differentials suggest weakness will continue.
Meanwhile, the commodity really continues to accelerate, with Basic Materials Power-bar Differentials pulling to even and ahead of the SPY. XLB has put in strong relative performance over the past 30 days. If we drill down further, XLB sub-sector component XME is now in the top 1/3 of the 22 US market sub-sectors. The miners have joined oil companies as benefactors of the commodity rally.
5% of the market cap weight of XME comes from Bullish rated Cleveland Cliffs, which appears to be undergoing a "personality change" at the moment (market and model in agreement as the long term Chaikin trend turns higher). These are the types of set-ups that have offered us long-running trends and high double digit returns in the past. We'll be looking for CLF to clear overbought conditions and then bust through resistance at $9 to mark our entry point.
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