Consumer Staples Fund – Update July 2021

The 04/26/21 blog “Struggling to Rally” speculated that the Consumers Staples Fund (XLP) had completed an Elliott five – wave impulse pattern from the 03/23/20 bottom.  Subsequently XLP moved to a new all-time high and peaked on  06/04/21.

The daily chart courtesy of Trading View illustrates the updated Elliott wave count.

Usually within motive waves there’s a Fibonacci relationship between waves “one” and “five”, in this case Intermediate wave  (5) is .666 or 2/3 of Intermediate wave  (1).  The decline from the 06/04/21 top is currently ambiguous. The move down – 06/22/21 to 06/24/21 looks like a fifth wave, however the low on 06/24  is slightly above the 06/21/21 bottom. This could be a truncated fifth wave down or the 06/21/21 low completed a  Zigzag corrective pattern. 

At some point the situation will be resolved with either the XLP making a new high or breaking below the 06/21/bottom

The wave count and Fibonacci relationship of waves (1) and (5) favors a break below the 06/21/21 bottom.

The daily XLP chart 02/08/21 to 07/02/21 illustrates the complex subdivisions of Intermediate wave (5).

 With the S&P 500 and  Nasdaq Composite making new all-time highs, XLP could be an important indicator. If XLP fails to make a new high, it would add to the already significant evidence that US stocks could be forming a major top.

The next blog will update internal momentum indicators and forecast potential S&P 500 resistance.   


Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Advantage,, and Finance Magnates.

2 thoughts on “Consumer Staples Fund – Update July 2021

  1. Very well done piece. Substantial and notable divergence,
    as the consumer has led and driven economic rebound.

    For further evidence that a potential economic peak has already been reached,
    just look at a chart of the price of lumber,traded on the CME
    It’s down over 50 % from the “blow of panic”
    spike high of nearly 1700,in May 2021.
    It’s now trading at 783


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: