Wednesday, March 3, 2010

XHB Headed Higher

"No Double Dip - But Housing Horrendous" reads the headline. Sentiment toward housing is very pessimistic, but the XHB is almost at a 6 month high today. Any uptick at all in the housing numbers should ignite the XHB out of the symmetrical triangle pattern that counts complete. Today's high exceeded the wave B high, so the pattern is either complete or today's high is the wave B high. I think the former is correct, however, the 2/25 low of 15.26 must hold. So far, XHB, XRT and XLY look like the strongest S&P sectors. This is hard to fathom given the dismal state of the housing numbers and consumer confidence, but the market appears to betting on an upturn soon.

No comments: