Don’t Underestimate the Resilience of American Consumers

[Trading With Larry Benedict]( Don’t Underestimate the Resilience of American Consumers By Larry Benedict, editor, Trading With Larry Benedict Positive retail sales figures for June released this week showed that American consumers are still spending (up 0.2% month-over-month)… They’re just being more circumspect about where their dollars are going. That consumer resilience has been borne out by the price action of the SPDR S&P Retail ETF (XRT). In the face of rising interest rates and multi-decade-high inflation, XRT has traded in a sideways pattern for nearly a year. Yet XRT recently rose 20% off its June 1 low. So today I want to see if it can extend its developing rally… Recommended Link [Do You Bank in Any of these 110 Banks?]( [image]( [These 110 banks]( have enrolled in a controversial pilot program that could have drastic implications for your money. If your bank is on this list, you’ll need to move your cash before July 26… or risk your entire life savings. [Click here to see the full list.]( -- The Emerging Rally The 50-day Moving Average (MA, blue line) in the chart below shows that XRT is in a broad sideways pattern. The 10-day MA (red line) has crossed the 50-day MA numerous times, though. That reflects the swings within this overall sideways trend. SPDR S&P Retail ETF (XRT) [Image] Source: eSignal When we last [checked in on XRT]( (red arrow) in early June, it had just bounced out of oversold territory and was in the emerging stages of a rally. As we noted at the time, this was a repeat of a recurring pattern (red circles)… When the Relative Strength Index (RSI) makes a ‘V’ or double ‘V’ out of oversold territory (lower grey dashed line), XRT also rallies. But there was a key distinction as to what happened after that… If the RSI broke through resistance (green line) and got a firm footing in its upper range, then XRT’s rally would continue. This happened up to XRT’s major peaks at ‘A’ and ‘B’ and its minor peak at ‘a’… However, when the RSI was unable to break through – like when the RSI rallied from oversold territory in March – XRT’s rally faded. In fact, after rebounding lower off resistance and getting stuck in its lower band from April through June, XRT instead continued to slide… Take another look: SPDR S&P Retail ETF (XRT) [Image] Source: eSignal Only when the RSI rallied from oversold territory in June (right red circle) did XRT’s down move change into an uptrend. This time, the RSI broke through resistance, propelling XRT higher. Adding to the bullish sentiment, the 10-day MA also broke higher. It is accelerating above the 50-day MA. So with XRT’s rally looking promising, what am I looking for next? 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. Watch Out for Overheating For XRT’s rally to develop further, we’ll want to see the RSI remain in the upper half of its range. This pattern helped drive XRT’s rallies up to its previous peaks. However, we need to watch out for any signs that XRT is overheating and in danger of retracing. We saw this when XRT reversed at ‘A’ and ‘B.’ The RSI formed an inverse ‘V’ (orange circles) and tracked lower from overbought territory (upper grey dashed line). The other thing we’ll need to monitor is our two MAs. After each of the peaks at ‘A,’ ‘a,’ and ‘B,’ XRT reversed sharply. The 10-day MA rolling over and dropping quickly will also warn us of any growing retracement. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag One new subscriber shared his thoughts about getting started with spread trading in The S&P Trader. To learn more about how to join us, simply [go right here](. Hey Larry, it was a very good week. I am a new subscriber with about 3 weeks under my belt. I am an old guy, and the learning curve is truly steep. But I think I've found a home and look forward to reaching my first goal of 2 contracts per trade. I am conservative with trading, so that will take some time, but I'll get there. One observation: I have seen with other programs in years past and see the same with S&P Trader that summaries reflect perfect conditions for entry. For example, I did not fill on one of the contracts on 7/12. Had I been sitting at my computer, I no doubt would have made that trade. I did not always get the entry that the summary reflects for the same reason. I am not complaining. I am just saying that not quite reaching the results shown in the summaries is not a reason to get discouraged. It is normal. – Denham S. If you’d like to send us any questions or comments, our inbox is always open. Write us at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [The One Ticker Retirement Plan]( Over the Shoulder Demo Now Available Market Wizard Larry Benedict crushed the market in 2022. But he didn't do it with a “traditional” method… For a limited time, he’s sharing a free over-the-shoulder “demo” of his strategy in action. It takes less than 10 seconds… [Watch it here.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](