The Home Construction ETF (ITB) is leading the market as it surged to a new closing high this week. While this high is certainly bullish and points to upside leadership, the real signal triggered back in early July as the Trend Composite turned bullish with an outsized move. Let’s review this signal and then look at a recent signal in Home Depot. The chart below shows ITB with the Trend Composite and Normalized ROC. The Trend Composite aggregates signals in five trend-following indicators. Normalized ROC is the 5 period point change divided by ATR(5), which shows price moves in ATR terms. Values greater than +3 indicate that price advanced more than 3 ATR(5) values in five days. This is an outsized move that can kick start an extended uptrend. Note that these indicators are part of the TIP Indicator Edge for StockCharts ACP (here). The chart above shows three signals…
