Profiting On An Infrastructure Spending Play
On March 8th, when XLI was trading at 95.88, this is what Mike Paulenoff discussed with our MPTrader Members about the S&P Industrial SPDR ETF:
"In addition to the XLB (Materials SPDR), another vehicle (arguably a better one) to ride the infrastructure spending narrative, is via the XLI Industrial ETF. The technical set up is extremely powerful, as the price structure rockets off of last week's dip into strong support at the 50 DMA and at the March 2020 up trendline. If XLI is heading to the upper boundary line of its March 2020 bullish price channel, then the target is 103-104. Only a sharp decline that violates presumably very strong support from 90 down to 87, will wreck the set up."
Last Wednesday, March 31st, with XLI trading at 99.16, Mike posted the following update in our Discussion Room:
"On the day of President Biden's speech to unveil the infrastructure bill, we find XLI trading above 99.00 (the intraday high is 99.18 so far), in route to my next immediate target of 101, but with an outlier target zone of 104-106 (see my attached chart). Key support on any forthcoming weakness resides at 96.60-97.00."
President Biden subsequently proposed a $2.25 trillion infrastructure spending plan that some strategists on The Street are comparing to the 1950's explosion in building-- and repair-- of roads, highways, bridges, tunnels, airports, bus and train terminals, et al.
What's next for the XLI, especially considering the Industrial SPDR ETF is up 107% off of its March 2020 low? Will pent up demand for "value stocks" continue in any case? Will interest rates and inflation remain contained to facilitate another 2 to 3 quarters of booming domestic growth?
Join Mike and our MPTrader Members as they discuss and navigate the forthcoming exciting or disappointing prospects for the infrastructure rollout and rebuild, as well as many other names, sectors, ETFs, macro indices, and commodities in Mikes diary throughout every trading day.
More Top Calls From Mike
Eight weeks ago, Mike Paulenoff discussed the budding technical setup and upside breakout in CRWD (CrowdStrike Holdings) with our MPTraders members, writing:"CRWD has followed the bullish scenario we discussed in late August, and in fact, today (10/06/23) has thrust above 5 months of resistance to new recovery high territory at 176.32. Although my next optimal upside target zone is 190-200, the BIG picture setup points to 230-240 thereafter... Last is 174.86...
On Monday morning, November 13, 2023, a full 5 trading sessions before the approaching November Options Expiration (OPEX) (11/17/23), I posted my chart-based commentary for our members:SPY-- Considering that Friday is November Option Expiration, where are the "magnetized strike prices" as we start OPEX week? Based on my attached Hourly Chart, the magnetized strike price zone spans from 436 to 441. Should SPY take out the upside barrier of 441, then the follow-through outlier magnetized target could be as high as 450 before or on Friday.
On October 23, 2023, ten days before the November 1st FOMC meeting and policy statement, I posted the following commentary about the downward-spiraling TLT (20+ year T-bond ETF):My attached 4-hour Chart of TLT shows that the relentless and near-vertical downtrend that commenced at the beginning of August from around 100 hit a new long-term low at 81.92 this AM, positioning it in my intermediate-term optimal downside target zone from 80 to 82.
On the afternoon of September 25, Mike Paulenoff posted a warning signal to MPTraders members about the developing acute oversold condition in RTX (formerly Raytheon Technologies), writing:"RTX (formerly Raytheon Technologies) hit a new multi-month corrective low of 71.02, down 33% from the 4/10/23 post-pandemic High at 106.02. Although RTX has violated my optimal target window of 73-75, the stair-step corrective pattern off of the 4/19/23 high at 104.
On October 3, Mike Paulenoff posted the following "Heads Up!" about GLD (SPDR Gold Trust, ETF) for MPTrader members: "GLD has pressed to an important technical inflection window from 169.50 down to 166.30, from where I will be expecting corrective downside exhaustion off of the 5/04/23 high at 191.36, and new buying interest. From a nearer-term perspective, given the acute oversold but CONFIRMED Momentum reading of 17.16 an hour ago, my preferred scenario argues for another loop down that marginally violates today's low at 168.