Basic Materials had a horrible first month of Autumn. The Dow Jones U.S. Basic Materials Index )DJUSBM) dropped form a level of 360 all the way down to 306 -- that's a 15% drop. But since then it has been clawing back.
The chart above shows the quick move off the bottom in the now well-known V-shaped recovery. That was followed by some consolidation in a sideways pattern before a second leg higher -- about the same length. The ensuing sharper pullback then found support at the prior consolidation area and Wednesday confirmed a reversal higher.
Some will look at this as a Elliott Wave starting on the 5th-Wave higher. But it actually violates Wave principles on at least one count, as the 4th corrective wave entered into wave-1 territory.
But there is a complex pattern building -- A-3 Drives, which calls for a third leg higher back to 360 again on this leg up. The current leg looks legitimate as the RSI and MACD are both also turning back higher.
You cannot trade the Basic Materials Index directly, but the SPDR Materials Select Sector (ARCA:XLB) is a very close proxy.