Since the election, it has been popular to talk about global reflation taking place. Traders look at the price of stocks, copper and steel and think the price rise means that global growth and reflation is taking place.
Below looks at ETF United States Steel (NYSE:X) over the past few years and the message it could be sending about the recent reflation theme.
U.S. Steel retraced 50% of its 2010/2016 decline and hit falling resistance line (1) at (2). At the same time it was hitting dual resistance at (2), it was at the apex of a bearish rising wedge pattern.
Since hitting that resistance, it has backed off more then 10%, breaking support of the bearish rising wedge.
The reflation theme has been popular around the world. For that to continue, it does NOT want to see weakness at (2).