Consumer Discretionary names (XLY) are the majority of our short exposure right now.
We saw the sector trading into multiple support metrics in a broad market that is short-term oversold (a hazardous concept), and started to reduce some of that short exposure.
Over the course of the day, the selling momentum in the XLY did not slow down; in fact, it increased. That, has us taking a second look at what we posted earlier today.
The XLY train ran hard into the close, and none of its negative momentum indicators slowed, or started to bottom. We are concerned support may not hold.
We will continue to monitor the situation and update our outlook as the market dictates.
XLY’s sell-off weakens both market leadership and GDP prospects.
Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)