[Trading With Larry Benedict]( Earnings Will Reveal a Fresh Look Into Our Walletsâ Habits By Larry Benedict, editor, Trading With Larry Benedict Earnings season is about to go into full swing... That means we’ll soon find out how consumers and companies are getting along. Consumers have already had to deal with 300-basis points (or 3%) of rate rises this year. And with inflation still running at over 8%, these results will reveal how much consumers are reeling in their personal consumption. Yesterday, we checked out [one part of the consumption equation]( in the consumer staples sector. Today, we’ll continue with the theme. Let’s look at the Consumer Discretionary Select Sector ETF (XLY) to scope out potential trades… Recommended Link [$130 trillion revolution in this cup?]( [image]( Don’t try this at home. Former Goldman Sachs executive Nomi Prins recently drank the contents of a brand-new type of battery… To reveal why 5 billionaires are investing in [this tiny $4 company behind it.]( And how it could unleash a $130 trillion energy revolution. [Watch the 30-second demo here.](
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Steady Decline On the chart below, the 50-day moving average (MA – blue line) shows XLY’s steady decline from the start of 2022 through July. During that fall, XLY made a series of lower highs as it lost a mammoth 37% of its value. Let’s take a look… Consumer Discretionary Select Sector ETF (XLY) [Image] Source: eSignal There were also two other classic signs of XLY’s bearish pattern… - The RSI tracked in the lower half of its range (below the green line) for most of the down move. - The 10-day MA (red line) also tracked below the 50-day MA – apart from those lower highs in March and April. As you can see, XLY initially found support (orange line). But then it jumped when the RSI rallied strongly out of oversold territory (lower grey dashed line) in May. When that rally faltered and XLY rolled over at ‘A,’ it then retested and held that support. [New Battery up to 94% Cheaper Than a Tesla Battery]( As the RSI tracked higher – making a series of higher lows (bottom red line) – XLY rallied higher again. This time, XLY’s rally was stronger than the short-term bounce in May. The 10-day MA crossed above the 50-day MA and the RSI bullishly broke into the upper half of its range. Take another look at the chart… Consumer Discretionary Select Sector ETF (XLY) [Image] Source: eSignal However, XLY peaked at ‘B’ when the RSI formed an inverse ‘V’ and reversed from overbought territory (upper grey dashed line). XLY then fell as the RSI broke through support into its lower range. And the 10-day MA broke strongly below the 50-day MA. When we looked at XLY a couple of weeks ago (red arrow), it was closing in again on its long-term support (orange line). Now, with XLY retesting that support and the RSI again in oversold territory… what can we expect from here? 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 â at zero cost to you. Just [click here]( to check it out. Holding Support Right now, the 10-day MA is still accelerating below the 50-day MA. And the 50-day MA has rolled over and is trending down. Unless either of these moves peters out or reverses, XLY will break through support and start another leg down. This could provide the setup for a short trade. We’ll also need to keep a close watch on the RSI. Although it’s formed several ‘V’ moves this past month, each of those moves quickly ran out of steam. For XLY to hold support – or have any chance of rallying – we’ll need one of these ‘V’ moves to garner more momentum and send the RSI back up toward resistance. Any prolonged move for XLY beyond that would require the RSI to break back into the upper half of its range. This earnings season will likely stir up a fresh wave of volatility as the market digests companies’ results. But for traders ready and nimble enough, it’ll also hand us plenty of trading opportunities. Regards, Larry Benedict
Editor, Trading With Larry Benedict Reader Mailbag How have your spending habits changed throughout this yearâs inflation-ridden economy? Let us know your thoughts – and any questions you have – at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Quit 99.9% of Stocks & Make a Fortune? (Over 800 Winners)]( Is it possible to QUIT investing in 99.9% of stocks and make MORE money? Even during America’s biggest crashes like 2000, 2008, 2020, and 2022? One reclusive trading millionaire has done exactly that… nailing MORE winning recommendations than ever. â A record-breaking 800 winning trade recommendations… â 10 “Double Your Money” trades in 2008… â 7 “Double Your Money” trades in 2020… â [12 “Double Your Money” trades in 2022…]( â And predicted the 2020 & 2022 crash weeks in advance… Now, he’s revealing what he calls: [The #1 Retirement Stock]( He’s used this single stock to help thousands of people, from school teachers to doctors, profit right through massive stock market crashes like 2000, 2008, 2020, and 2022! Now, it's your turn. [Click here to discover how to collect 37 YEARS of normal market gains in just 8 daysâ¦]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. [The Ultimate Guide to Taking Back Your Privacy]( [The Traderâs Guide to Technical Analysis]( [The 101 Guide to Pre-IPO Investing]( [The Opportunistic Trader]( The Opportunistic Trader
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