We're noticing many important cyclical groups beginning to transition to red, indicative of the lingering risk aversion impacting the U.S. markets right now.
The Semiconductor $XSD and Homebuilders ETF $XHB are two perfect examples.
Homebuilders $XHB are potentially forming a longer-term head and shoulders top.
While they sit on a strong level of support and we'd be surprised to see the ETF melt straight through this level, the fact this important group has transitioned to red points to growing cracks in this bull market.
Likewise, Semiconductors $XSD are also selling off very hard right now.
While they remain stuck in the middle of a long-term range, this does point to a weakening of market breadth among important risk-on groups.
In a market environment such as this, being selective remains more important than ever. The industry with perhaps the greatest risk in a looming trade war is the consumer.
JC Parets and retail-expert Jeff Macke went live in a special strategy session to discuss exactly this - the best stocks to buy in the face of a trade war.
