Just in Time to Catch the End of Summer

Although a majority of the name must wade through the current earnings season, there is no denying that the XME ETF weekly chart, seen below, is threatening to emerge from a consolidation pattern which has been forming since shares put in an intermediate-term top back in late-january. 

Since then, most of the XME names, which includes steels, non-precious miners and even a few precious miners, have been quiet or correcting sharply, leaving little in the way for bulls in terms of quality swing trade setups. 

However, with the emerging market/energy/materials complex all rallying in unison this morning as the U.S. Dollar softens, we would be remiss not to follow this group more closely for long entries even as we navigate the many earnings yet to come. Also note the XME weekly sporting a narrowing triangle with price flexing as it neared the apex, often a bullish sign. 

True, we already have CLF (a major non-precious miner) out of the way after Cliffs gapped up sharply after earnings, but plenty of names like FCX TECK X, and many more, are still to come. 

So while Bitcoin, FB, and GOOGL, all make headlines this morning, our focus is on picking off some plays in this complex which is suddenly making a case for a late-summer rotation. We looked at emerging markets in a blog post on Friday. And now come the materials names, which should add credence to the bull rotation thesis.