VCR – Vanguard Consumer Discretionary

The Vanguard Consumer Discretionary Sector (8/25/15) Short-term (Positive) : Intermediate Term (Positive) : Long-term (Positive) In early June, we were solidly in a consolidation pattern. The "Brexit" break in late June across all sectors broke that pattern to the Jan/Feb 2016 support, and bounced. Now that we have moved up out of the pattern, above the 200-day moving average (122), and challenged 52-week highs, the June low of 116 would be the intermediate term target for a test if the sector were to break its 200-day moving average at 122. The big picture remains long-term positive. The base below 124 to 105 would support an upside target of 143. The short-term resistance is at 131.65 and support at 125.60. Note that the "rising tops" in July and August are matched with declining momentum on the MACD. This would be seen as a negative if we start to see a short-term correction, thus targeting 122. This is a sector that we see as positive into the end of the year, but at risk of a seasonal pullback in September/October. If we manage to hold above the 122 and extend the pattern through the seasonal pullback, it will bode very well for a leadership run through the holidays, which is what we want to see in the Consumer Discretionary sector. Cons Disc Top 10 Holdings AMZN - Inc. HD - Home Depot CMCSA – Comcast Cl. A DIS – Disney Co. MCD - McDonald's Corp. SBUX - Starbucks Corp. LOW – Lowe’s Cos. NKE – Nike Inc. Cl. B PCLN – Priceline Group Inc. TWX – Time Warner