This Extended Up Move Will Likely End in Disappointment

[Trading With Larry Benedict]( This Extended Up Move Will Likely End in Disappointment By Larry Benedict, editor, Trading With Larry Benedict On [November 15]( we saw a strong market transition out of “Big Tech” into industrial stocks such as the Industrial Select Sector SPDR ETF (XLI). In less than a month, XLI had rallied 21% from its October low. This rapid move higher put XLI in danger of overheating... However, after a brief pullback, XLI rallied even higher. But now buying momentum is weakening, and XLI looks vulnerable again. So today we’ll see what’s in store from here… Recommended Link [This opportunity is off the charts!]( [image]( This tiny company doesn’t cost hundreds of dollars like Tesla. Right now, it trades for around $4. The opportunity is off the charts. Which is why one expert on CNBC said, “You can follow the money... all the investors are smelling it.” So why are 5 billionaires – Bill Gates, Jack Ma, Richard Branson, Michael Bloomberg, and Jeff Bezos – betting this tiny $4 company could derail Tesla’s plans for the future? Former Goldman Sachs executive Nomi Prins has put together a quick 30-second demonstration to answer that question. [Click here to learn more.]( -- Rallies Petering Out On the chart below, XLI’s series of lower highs (A, B, and C) shows a common bear pattern. Each countertrend rally petered out below the previous high before rolling over and heading lower again. Check out the chart… Industrial Select Sector SPDR ETF (XLI) [Image] Source: eSignal Within this long-term downtrend, you’ll also notice the action of our two moving averages (MAs)… After each of those peaks at A, B, and C, the 10-day MA (red line) bearishly crossed below the 50-day MA (blue line), confirming XLI’s next leg down. The 10-day MA tracked below the 50-day MA until the next major countertrend took hold. Each countertrend rally coincided with the Relative Strength Index (RSI) forming a ‘V’ out of oversold territory (lower grey dashed line). [The One Ticker Retirement Plan Over the Shoulder Demo Now Available]( When the RSI made a double ‘V’ (red circle), XLI was able to form a base for its current rally around its yearly low. Then, as the RSI broke up through resistance and gained traction in the upper half of its range, XLI’s rally continued. When we last checked XLI in November (red arrow), the rally had pushed the RSI into overbought territory (upper grey dashed line). Take another look below… Industrial Select Sector SPDR ETF (XLI) [Image] Source: eSignal I was watching out for the previous pattern at ‘C’ to repeat. If the RSI formed another inverse ‘V’ out of overbought territory – and then retraced lower – XLI would’ve rolled over. But XLI continued to make higher highs while the RSI see-sawed along the overbought line. I knew a change of direction was likely after the RSI and stock price began to diverge (orange lines). So 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 – at zero cost to you. Just [click here]( to check it out. This Down Move Could Accelerate Recently, the RSI fell further below the orange line. At the same time, XLI broke below $100. Now, the RSI is tracking back down close to support. So what happens around this level is key… For XLI to have any chance of resuming its up move, it’ll first need to hold this support. The next test would be for XLI to take out its December 2 high of $102.69. However, if the RSI breaks support and gets stuck in its lower range, then we can expect this emerging down move to accelerate. I’ll also be watching our two MAs… If the 10-day MA reverses and starts converging toward the 50-day MA, then that’ll add further confirmation of XLI’s down move. And that could set us up for a potential short trade. Regards, Larry Benedict Editor, Trading With Larry Benedict P.S. Thank you to everyone who joined me last night at my [750% Boost]( briefing. There, I shared how we can get a 750% better yield on our cash and generate income on a regular basis… rather than watching inflation eat into our buying power. We can do this via [structured notes]( which aren’t something most people have heard of. But they’re how I’ve been making a consistent profit since 2011… and with the current market volatility, the returns they offer are even better. I encourage you to learn the whole story behind these unique investments. So, if you weren’t able to attend last night, a replay is available to watch for a short time by [clicking right here](. Reader Mailbag In today’s mailbag, a [One Ticker Trader]( member thanks Larry and his team for a positive experience with the service… I would like to genuinely apologize to the staff for not acknowledging them as well. Your generosity and kindness has given One Ticker Trader the success we enjoy. At $19.99, your work may go unappreciated. But I’m one trader who very much acknowledges and appreciates each one of you – and your families who support you. Thank you to all of you and your families. May God bless every one of you with health, prosperity, and a safe holiday season into the new year. I wish you all a very Merry Christmas. – Walter S. Thank you, as always, for your thoughtful comments. We look forward to reading them every day at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Market Wizard forecasts 5 years of famine]( Hi. Larry Benedict here with a new forecast. I believe we’re headed for a serious rough patch… I believe all the indexes will be flat or negative for a long time. We’ve had 10 years of plenty. Now we’re looking at five years of famine. I predicted the Fed would issue a series of rate hikes…. And that is what is going to cause this prolonged bear market. I think we’re about to see a repeat of the late ’70s and early ’80s. Inflation was rampant then, so the Fed issued a series of rate hikes to tamp it down. Naturally, that combination created wild volatility. It was very similar to what we’re seeing right now. I’ve lived through times like these… And my One Ticker Trader is perfect for what’s coming. I believe you could have several opportunities to see huge gains in very little time. To learn all about it… [Watch my latest video right here.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. 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