S&P 500 Sector SPDR Preview - May 18th, 2018

In financial markets, there are certain price levels that are more significant than others with regards to the amount of supply and demand that exists at them.

In financial markets, prices are always doing one of three things.  They are either going up, going down, or staying the same. 

BHT utilizes a process and methodology that has been developed over twenty years in order to identify these levels and price trends. 

BHT does not utilize many of the traditional Technical Analysis Techniques such as Fibonacci Retracements or Elliot Waves.  

BHT questions and doubts the validity of many of these techniques and believes they are in the realm of Bigfoot and UFOs.  

 

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:

S&P 500 - The SPYs are trading around $272.  This has been the top of the recent range.  The recent lows in early February, late March and early April, and again earlier this month were around the $260 level.  The recent all-time high in late January was around the $286 level.

 

Technology -  In March the XLKs broke the uptrend that began in 2009.  The recent high was lower than the one that occurred in March.  This could be a bearish short-term dynamic.  This sector is 27% of the S&P 500 makeup.

 

Financials - The XLFs are testing short-term support around the $28 level.  This level was the top of the range during April.  This sector is 15% of the S&P 500 makeup.

 

Healthcare - The XLVs have been trading in a range between $80 and $84 since the end of March. The are currently in the middle of the range.  This sector is 14% of the S&P 500.

 

Consumer Discretionary - The XLYs have been trending higher since April and testing short-term resistance around $105.  The recent lows in February and April were around the $98 level.  This sector is 13% of the S&P 500.

 

Industrials - The XLIs have been trending lower since they hit an all-time high around $80 in January.  The recent lows in November, February, and early May were around the $71 level.  This sector is 10% of the S&P 500.

 

Consumer Staples - It is important to watch the $50 level in the XLPs.  It has become a short-term resistance level.  This level was the low in 2016, and the top of the range throughout 2015.  This sector is 7% of the S&P 500.

 

Energy - The XLEs are overbought and trading around the $78 level.  This is where they found resistance in January.  They also hit resistance and rolled over at this level in December of 2016. This sector is 6% of the S&P 500.

 

Materials - The XLBs are testing short-term resistance around the $60 level.  This level was resistance in late April.  This sector is 3% of the S&P 500.

 

Utilities - The XLUs are testing short-term support around the $49 level.  This level was also support in late March.  This sector is 3% of the S&P 500.