BHT identifies meaningful trends and important supply and demand levels in the financial markets. An understanding of these dynamics will add Alpha to any investment strategy. The following are important factors to consider in the S&P 500 Economic Sectors:
The S&P 500 closed back above the 2,350 level and may have broken the downtrend that began in March. Longer-term, there will probably be support around the 2,300 level because it was resistance in January. There is resistance at the 2,400 level because it is important psychologically and the all-time high on March 1st.
Technology - The XLKs have traded sideways over the past two months between $53.50 and $52.50. They are testing the top side of this range. Longer-term, if they head lower there may be support around the $48 level because it was the top of the range from the middle of September through the end of October.
Financials - The XLFs held and then rallied off of support around the $23 level and have broken the downtrend that began at the end of March. The $23 level was also support during January and on March 27th as well.
Healthcare - The XLVs have been consolidating around the $74 level over the past month. There is resistance around $76 because it was the top in March and last August. There will probably be support around $72 because it was the top in November and January. Longer-term, they could be forming a multi-year bearish reversal formation.
Consumer Staples - The XLPs have been consolidating around $55 over the past two months. If they rally they may run into some resistance around the $56 level because this is where they hit resistance and rolled over last July.
Industrials - The XLIs are consolidating around the $65 level after trading at all-time highs early last month. There is support around $64 because it was resistance in December and January.
Energy - The XLEs have trended lower since failing at resistance around the $71 level. This level was support in February and resistance from last August through last October. They are testing support around $68. This level was support in early November and again in March.
Utilities - The XLUs have been consolidating between $51 and $52 since the end of February.
Consumer Discretionary - The XLYs spent two months consolidating between $86 and $88, but yesterday broke out of this range and traded to an all-time high. $88 will probably be support now. Longer-term, there will probably be support around $82 because it was the top of the range in July and August and it was support in early December and early January.
Materials - The XLBs continue to consolidate around the $52 level. As expected there is resistance at this level because it was the all-time high in early 2015. Longer-term, $49 was the top of the range from the middle of July throughout the early part of September so there may be some support at that level if they trade down to there.