Global concerns sparked an initial move lower in early trading but the markets found support near the $2070 region in the SPX and then managed to finish the session slightly higher. Energy (XLE) was the clear leader on the WSC Scoreboard followed by Retail (XRT) and Materials (XLB). Transportation (IYT) lagged hurt by the State Department’s travel ban issued late Monday in response to the recent geopolitical events.
After making a low in late August, the XLE rallied until early November and has since held in well consolidating below the November 6th high. XLE may be setting up for a next leg higher but, ideally, we would like to see the downside gap filled at $63.85 or at least more consolidating before a breakout. Please remember that XLE is an ETF with very highly weighted stocks at the top with XOM, CVX, SLB, EOG, and OXY making up roughly 45% of the ETF (last checked 11/10/15) so one or all of these will likely be the main driver of any future moves.
Make note that there is lots of Economic Data on tap tomorrow as the markets will be closed on Thursday in observance of Thanksgiving and there will be a shortened trading session Friday.
Reported EPS 11/24-25/15 After the Close:
Reporting EPS 11/25/15 Pre-Market: