XLY

A few days I made this post about XLY and it's bullish precentage index. XLY has continued move upwards to a long term resistance level.  At this level it might upward momentum may be nearing exhaustion.

The Consumer and his pockets

Below is a chart of XLY which is the consumer discretionary.  Discretionary income is money people have to spend on crap.  The economy is dependent on you spending your money on crap.  Tomorrow retail numbers come out and the government is hoping you spent the little money you have on crap. 

When looking at the Bullish Percentage Index of Consumer Discretionary Income, it is showing signs of Overbought.  A BP above 75 is considered overbought, BPDISC is at 82.  It is also nearing some long term monthly resistance levels seen on the chart.

Now look at the technicals of this ETF:

Two things pop out at me.  First is the long-term bearish divergence that has been going on since June.  Secondly, XLY is very overbought based on the the STOCH.  This ETF is looking like it might be losing steam the steam needed to climb through the longer-term resistance levels.  Keep this guy on your short radar.