GLOBAL STOCKS CONTINUE TO RALLY -- CONSUMER DISCRETIONARY SPDR IS TESTING UPPER PART OF TRIANGULAR FORMATION AND MAY BE NEARING AN UPSIDE BREAKOUT INTO RECORD TERRITORY

GLOBAL STOCKS START THE WEEK ON A STRONG NOTE... Stocks around the world are starting the week on a strong note.   That includes foreign developed and emerging markets in Europe and Asia.   The three U.S. stock indexes are hitting new records.  So are a number of sector SPDRS including healthcare, technology, communication services, and financials.   Ten sectors gained ground.   Bond yields are also rising again as investors continue to sell Treasury bonds and buy economically-sensitive stocks.  One cyclical sector in particular caught my eye today because it appears to be on the verge of setting a new record of its own.

CONSUMER DISCRETIONARY SPDR MAY BE ON VERGE OF NEW RECORD...Chart 1 shows the Consumer Discretionary SPDR (XLY) moving up to challenge a flat trendline drawn over its July/September highs.  The XLY has been trading between two converging trendlines over the last five months in an "ascending triangle" formation.  That bullish pattern is usually resolved by an upside breakout.  Its daily MACD lines (upper box) also appear to be close to resolving a triangular formation on the upside.  The XLY has been a market laggard.  The solid gray line shows the XLY/SPX ratio falling sharply since September.  It may be time for that economically-sensitive sector to start playing catch up to the rest of the market.  An upside breakout to a new record would be a good way to start.  It's being led higher today by autos and auto parts.