Look to Momentum When Price Action Starts to Fade

[Trading With Larry Benedict]( Look to Momentum When Price Action Starts to Fade By Larry Benedict, editor, Trading With Larry Benedict The SPDR S&P Metals and Mining ETF (XME) was on an absolute tear just over a year ago. It rallied a massive 68% in just a few months leading up to its April 2022 peak… But after a sharp reversal, XME give up all its yearly gains. After bottoming out in July (right on long-term support), XME traded in a sideways band before it rallied into 2023. That rally looked likely to continue when we last [checked in on XME]( on February 16 (red arrow in the chart below). But that move hasn’t panned out. XME is now re-testing a key short-term level. So, let’s see what’s in store from here… Recommended Link [Banks Collapsing... Former President Arrested... What’s Next?]( We keep saying it… Because it’s true. It doesn’t matter what cycles through the news… [image]( Like former President Trump being arrested in New York or how the market reacts… Market Wizard Larry Benedict continues to generate wins for his subscribers. What’s his secret? He doesn’t invest the traditional way… He doesn’t “buy and hold.” And he doesn’t trade the way a traditional broker would tell you to. Larry’s been using this type of strategy for decades. As a hedge fund manager, it helped him deliver $95 million to his clients during the 2008 financial crisis. And now Larry’s revealing his unique trading strategy – including a 10-second demo of him in action. If you’ve been losing money in the markets… Larry’s strategy could be just what you need. [Click here now to watch.]( -- Building a Base On the chart below, you can see XME’s long-term support level dating back to mid-2021. XME plummeted from its April 2022 high… then re-tested and held this level in July and again in September. The long-term 50-day moving average (MA, blue line) also flattened out over this period as XME shifted into a sideways pattern… SPDR S&P Metals and Mining ETF (XME) [Image] Source: eSignal XME tested and held long-term support while the Relative Strength Index (RSI) rallied from oversold territory (lower gray dashed line). And it continued to rally as the RSI broke through into the upper half of its band (above green line) to a new high in early December (‘b’). XME then retraced and found a base – and a new short-term support level – near the end of the month. And it rallied even higher from there to ‘C’ along with two bullish technical signals… - The RSI briefly dipped below support (green line), regained momentum, and traded back into the upper half of its range. - The 10-day MA briefly crossed below the 50-day MA, broke higher, and accelerated back above the 50-day MA. Throughout this rally, you can see that the 50-day MA also trended higher. XME tried to rally again in February after a pullback and reached another peak in early March. But the move up reversed again. The RSI fell through support… And the 10-day MA crossed back below the 50-day MA. And with that fall, XME was back testing short-term support. And that level help as the RSI rallied from oversold territory. But it couldn’t break through resistance despite several attempts in April. Instead, the RSI reversed lower… and dragged XME down with it. So now, XME is trading on support once again. And the RSI is moving close to oversold territory (red circle). So, what am I looking for around 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. Hold Short-term Support The more often a price tests and holds a level (whether support or resistance), the stronger that level becomes… And the more likely we’ll see a price rebound off that level. So, in XME’s case, holding short-term support is vital if it is to rally from here. So, action around the RSI is key… Right now, the RSI is tracking close to oversold territory. For XME to rally, the RSI has to rebound and start moving higher. But if the RSI gets stuck in its lower range without a solid bounce, there won’t be enough momentum to push XME higher. And XME will likely break down through short-term support and drift lower. Regards, Larry Benedict Editor, Trading With Larry Benedict Reader Mailbag Do you think XME will get the push it needs? Let us know your thoughts at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [From DOUBLING My Money to -60% Portfolio… My Millionaire Trader Dad Says “Do THIS Now”]( Grant Clark here, son of millionaire trader Jeff Clark. 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