A week after the election, stocks are now digesting some of their impressive gains.
Some groups like banks, software, Ark funds, and even energy are holding up the best, while others struggle to hold onto those gains and are now giving it all back.
The SPDR S&P Metals & Mining ETF $XME is a great example of this second group that is losing steam.
XME tried to break out from a multi-year base the morning after the election, but was immediately rejected, and has since fallen back into its old range.
Although the bullish momentum regime remains intact (as measured by the 14-period RSI), momentum has been waning, putting in a bearish divergence.
As long as XME is below its prior cycle highs from 2022, there's nothing to do with industrial metals stocks right now.
We need to remain patient. They aren’t ready.
There are many other areas where we will have better opportunities to make big gains between now and the end of the year.
