Voila. There you have it. CPI was up +0.7-pct, and the market initially didn't like it (for XLB). Btw the market (you and me) ignored the talking heads who told us "there ain't no inflation".

XLB closed at 31.72, up +0.22-pct W/W, but +0.28-pct was Friday's gain. In a rising inflation environment, XLB and XLE are still the places to be, but you have to look at the components. This week, for instance, as crude oil prices lifted on geopolitical worries, the chemical company stocks got hit (since they have to buy oil to process it into chemicals, and the economy isn't strong enough to pass along the price increases in this particular sector).

So Dupont Chemical (DD) got hammered and so did Lyondell (NYSE: LYO).

When oil prices come down, those share prices will most likely rise. In fact, for a trade, do you see the depth to which the RSI has fallen, particularly on the LYO? This is something you should be looking at.

And what does that mean? Yes, you buy. Particularly if, as and when the price of oil is falling.

And, for instance, after the stock has had a terrific run to the upside, and the CEO is making the rounds of Financial Entertainment TV, where personalities like Kudlow and Cramer are bowing at their feet, as in the case of the Lyondell CEO last summer, you take one look at the RSI and say just one thing to your broker: "Sell".

And now when you see LYO below RSI=30 on the Weekly and Bi-Weekly (which means it is close on the Monthly), you know it's in your Accumulation Zone. Then you swing over to the Daily and Hourly Data series to watch the RSI for a bottoming out, particularly on sharply down days, like the past two.

Before pulling the trigger, you look at all the peer group stocks because you don't want to see the stock you are ready to buy out of sorts with the peers in that industry. Many of these stocks are direct competitors, so they share the same markets and cost components. There ought to be some degree of synchronicity in their trading patterns.

And since the Monthly RSI is still above 30, you maybe buy half, or maybe you write some puts along with some purchases.

First of course, you have to like the company. In the case of LYO, I do; it's on the Cara Global Best 100 list because the company has (i) relatively good fundamental and quantitative performance against (i) the broad market e.g., the S&P 500 or the S&P 1200, and against (ii) its industry or sub-industry peers, which you can see by checking the data at Yahoo Finance (i.e., competitors).

And the coup de gras is to hit that buy (or sell) button right about the time you observe a popular talking head tell the TV or print media audience that (your stock) is extremely bad (or good).

It's not that these people (like e.g., Cramer) are 100-pct wrong (that's not true), but just that when they say "sell" to a large audience and you are ready to buy, they make your job easier.

If you buy, you want to buy into weakness. If you sell, you want to sell into rallies