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Basic Materials (IYM) has reflected relative weakness, compared to the S&P 500 for well over a year and a half, as it has underperformed the 500 index by 20%. Many are of the opinion softness in China has impacted this sector.

When IYM has hit lows since 2010, more often than not the broad market has rallied. IYM finds itself right now on a support line dating back to the 2009 lows. For the broad market to reflect on going weakness, IYM needs to fail at support.

Keep a close eye on IYM and FXI (China ETF) right now for key macro messages!!!

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