The Battle Between Consumers and the Fed

[Trading With Larry Benedict]( Larry’s Note: Tonight, join me as I go live about a market shock that’s just days away… Volatility has been rough this year, and this shock could send it even higher. As much as $1 trillion is about to change hands in a single day. But if we can get into position early, then there’s a way we can turn this situation to our benefit. In fact, [I know the best way to play it… using just one ticker](. At 8 p.m. ET tonight, I’ll explain exactly what’s coming – and even share the ticker. To attend, all you have to do is [RSVP right here](. See you there… The Battle Between Consumers and the Fed By Larry Benedict, editor, Trading With Larry Benedict The consumer discretionary sector is particularly vulnerable to rising interest rates With four rate rises already this year – plus another big one likely to come at the Fed’s meeting on September 20-21 – consumer discretionary will remain under intense pressure as consumers continue to tighten their belts. [Chart]( When we [checked out the Consumer Discretionary Select Sector ETF (XLY)]( a few weeks ago (red arrow on the chart below), we saw that after falling nearly 40% this year, XLY had found a base for a rally… However, that rally faltered as momentum petered out. Today, we’ll discuss the action since then and take a look at what’s coming next… Recommended Link [Tonight at 8 PM ET Market Wizard Larry Benedict is revealing:]( “How to Get ‘In the Black’ for the Year Using Nothing but a Single Ticker Symbol” [image]( In tonight’s urgent briefing Market Wizard Larry Benedict reveals the #1 ticker to trade in September. All thanks to a massive market “shock” that’s guaranteed to hit in mid-September! Hurry! There’s not much time left… [Click here to sign up immediately!]( (By clicking the link, your email address will automatically be added to Larry’s RSVP list.) -- A Common Bear Pattern On the chart below, the 50-day moving average (MA – blue line) shows XLY’s long-term downtrend that kicked off at the start of the year… Consumer Discretionary Select Sector ETF (XLY) [Image] Source: eSignal Apart from a brief period in March and April, the 10-day MA (red line) bearishly tracked below the 50-day MA for the duration of that down move. Another common bear pattern throughout XLY’s down move was a series of lower highs (January, March, and June). But the Relative Strength Index (RSI) trended higher through June and July. That helped XLY form a base (red horizontal line). Then, two bullish patterns confirmed XLY’s emerging rally… - The RSI broke back into the upper half of its band (green line). - The 10-day MA crossed back above the 50-day MA. However, that promising rally topped out on August 16 when XLY ran into a common reversal pattern… [Holy Cow, Only $19!]( XLY made higher highs (upper orange line) while the RSI indicated momentum had peaked (lower orange line). When these are heading in different directions, we know that a reversal is likely in the cards. And that’s exactly what happened... The RSI reversed downward, bringing XLY’s stock price with it. That move saw the RSI tracking right down on top of support. For XLY to have any chance of resuming its recent rally, the RSI had to hold support. A break below support would mean that XLY’s pullback had further to go. The latter of these two scenarios is currently playing out. And the RSI could test oversold territory (lower grey dashed line). So, what can we expect from here? Let’s take another look at the XLY chart… Consumer Discretionary Select Sector ETF (XLY) [Image] Source: eSignal The longer that the RSI stays in the lower half of its band, the longer this down move will continue. A prolonged move in this lower band could see XLY re-test its June lows. This move could provide the setup for a potential short trade. The other thing I’m watching is our two moving averages… Right now, the 10-day MA is closing in quickly on the 50-day MA. The 10-day MA breaking below the 50-day MA would add confirmation to XLY’s down move… and a short trade. Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Prepare for a Shock While XLY’s chart pattern looks promising for a potential trade, it’s not the only one I’m gearing up for right now… There are other trade deals with a massive shock that’ll hit the markets over the coming week. While most people have no idea it’s coming, Wall Street insiders have been preparing for this shock for weeks. That’s why [tonight at 8 p.m. ET, I’m holding an urgent briefing]( to show investors what’s going on behind the scenes… and how they can turn this upcoming volatility into potentially huge gains using just one ticker. After one of the toughest markets in years, those who act quickly could use this event to turn any “red ink” in their portfolios back into the black. Please don’t miss this urgent briefing. To reserve your spot, simply [go right here](. Regards, Larry Benedict Editor, Trading With Larry Benedict Reader Mailbag In today’s mailbag, a [One Ticker Trader]( member thanks Larry for this trading program… I’m one of your supportive subscribers of the One Ticker Trade program. I made profits on all the three QQQ suggested alerts in August by following your alerts… for which I wish to say a big thank you again! – Michael S. Thank you as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Nomi Prins: “What I said on Fox Business…”]( “Did you catch my recent interview on Fox Business? On the air, I shared a prediction that’s already playing out in the markets, right now. I said the Fed wouldn’t raise rates as much as most in the mainstream media expect. And so far, I’m right. Later in the segment, Fox host Charles Payne asked me: “What’s happening that most people might be missing… that you really want people to know?” I only had a few seconds to answer on the show, so I’ve recently decided to record another, more in-depth [interview to show viewers exactly what people are missing in today’s markets.]( In it, I also made a big new prediction about what the Federal Reserve will likely do next… and what Americans can do to ensure their financial future is protected.” — Nomi Prins [Click here to see the entire interview.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. 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