The Discreet Decline of Discretionary ETFs

XLY currently resides about 0.8% below its 50-day line, but the fund is not the only offender among discretionary ETFs. The Vanguard Consumer Discretionary ETF (NYSEArca: VCR) is trading just below its 50-day moving average as well. Both ETFs are down about 2.3% in the past month. [Consumer Discretionary ETFs Look to Rebound]

“All three of these metrics, momentum, breadth, and relative performance, have continued to weaken since the false breakout earlier this month. Traders do not seem to be showing signs of bullishness for this sector and with the latest price action, it doesn’t seem the mood is shifting anytime soon,” notes Thrasher.

Identifying culprits behind the weakness of discretionary ETFs is not difficult. Of XLY’s top-10 holdings, a group that combines for about 45% of the ETF’s weight, only Priceline (NasdaqGS: PCLN) has trader higher this year.

Consumer Discretionary Select Sector SPDR