S&P 500 Sector SPDR Preview - August 13th, 2018

S&P 500 Sector SPDRs Preview - August 13th, 2018

S&P 500 – The SPYs ran into some resistance at the $286 level.  There was resistance there because it was the all-time high in January.  Support at $280 will probably be tested.  This level is important because it was the top in February, March, and June before it was finally broken last month.  It should continue to be support in the near-term.   If it breaks we will probably see a meaningful selloff.   There may be support around the $268 level because it is where the two most recent lows were.

 

Technology – The XLKs have been consolidating above the $72.50 level.   This level was the top in June and the low in mid-July.  If they head lower there should be some support around the $71 level because it is where the recent lows were.  This sector is 28% of the S&P 500 makeup.

 

Financials – The XLFs are trending lower after failing again at resistance at the important $28.25 level.  This has been the top of the range since March.  The bottom of this range has been around the $26.80 level so there may be some support there again if they head lower.  This sector is 14% of the S&P 500 makeup.

 

Financials Long-term – In January the XLFs failed at the same levels that they did when they peaked in 2007 before the crash.  Markets do indeed have long-term memories and this clearly illustrates it.  If the XLFs rally to this level they will probably run into significant resistance there once again. 

 

Healthcare – The XLVs have been consolidating just under resistance near their all-time highs.  If they head lower there will probably be support around the $86.50 level.  It was the top in February and March and support in July.  This sector is 14% of the S&P 500.

 

Consumer Discretionary – The XLYs continue to consolidate around all-time highs.  There is some support around the $110 level because it was the top of the range at the end of June and in early July.  Longer-term there will probably support around the $107 level because it was the top in February and March.  This sector is 13% of the S&P 500.

 

Industrials – The XLIs broke their recent uptrend and are trending lower after failing at resistance around the $76.50 level.  That is where the three most recent highs were in April, May, and June.  They briefly traded above it but became overbought and quickly reverted.  This sector is 10% of the S&P 500.

 

Consumer Staples – The XLPs are testing support and their recent uptrend around the $53.50 level.  This level was resistance and the most recent high in April because it was support in February and March.  If they head lower there will most likely be support around the important $0 level.   Longer-term, it is important to watch the $50 level in the XLPs if they head lower.  This level was the low in 2016, and the top of the range throughout 2015.  It was also the top of the range during this May.  This sector is 7% of the S&P 500.

 

Energy - The XLEs are testing the lower end of their recent range.  They failed at $78 after becoming overbought in mid-May and more recently on July 10th.   This is the same level that they found resistance at in January.  They also hit resistance and rolled over at this level in December of 2016.  There is support around $74 because it the top in late April.  If they break this support there could be a meaningful selloff because there are no clear levels of support until they approach the $68.50 level, which was the top of the range from mid-February through early April.  This sector is 6% of the S&P 500.

 

Energy Long-term - The XLEs failed at the $78 level in mid-May and more recently on July 10th.  This is where they found resistance in January.  They also hit resistance and rolled over at this level in December of 2016.

 

Materials - The XLBs continue to consolidate between the $58 and $60 levels but they are testing the bottom of the recent range.  The $58 level is where they found a low in May and where they traded from the end of June through early July.  The $60 level is where they found a top in April and May.  This sector is 3% of the S&P 500.

 

Utilities – The XLUs are consolidating just above the $52 level after breaking their recent uptrend but they are testing the top of the recent range.   They will probably consolidate some more this week.  If they head lower longer-term, there will probably be support around the $49 level because it was the bottom of the range from February through June.  This sector is 3% of the S&P 500.