Entering Materials (XLB)

Today signaled a buy in the Materials ETF, XLB. We have been watching this for a while and with today's new high close we will be entering for the Blog Portfolio.

Here is a zoomed in view of the Daily chart and you can see clearly the higher closing high from today's trading. That new high signaled confirmation of the underlying strength we have seen relative to the SP500 recently and through my scans I am seeing significant strength from the XLB component stocks.

Here is a look at the Weekly chart. For the longer term perspective, you can see how today's breakout looks in context to the larger pattern.

This is a big level we are dealing with here as it represents a new recovery high for the Materials sector. The Relative Strength vs the SP500 has broken out significantly over the past month and shows the underlying strength recently. When I see an long term underperforming sector make a new high, and then breakout on a relative basis, it tells me that a new leader could be emerging for the market. We like new leaders and this is one of those setups that screams BUY!