SPDR S and P Metals and MI (AMEX:XME)

Q: Hi Chip Brian, I have some money invested in the XME ETF.  When do you expect a change toward the bullish side?

A: We called a Downtrend on the XME on 6/22 as it approached its 50-day moving average.  It bounced off that level briefly but it has since broke down below.  The other issue is that it broke below that trendline right on that same day (see attached chart) meaning it made a lower low.  Having said all of that, the 200-day moving average is just below at $31.30 which should provide support.  XME has rallied from $20 to $40 in a short period of time so some consolidation and retracement is to be expected.  Should it find a base of support near that 200-day average, coupled with news on the economic front, then perhaps a change in momentum may occur.