S&P 500 Sector SPDRs Preview - October 28th, 2019

S&P 500 SECTOR SPDRS PREVIEW - SPY XLK XLF XLV XLY XLI XLP XLE XLB XLU

BHT utilizes Technical Analysis to identify meaningful trends and important supply and demand levels in the financial markets. The following are important dynamics to consider in the S&P 500 Economic Sector SPDRs: 


S&P 500 SECTOR SPDRS PREVIEW - OCTOBER 28TH, 2018 PDF

S&P 500 – The SPYs broke support at the $270 level. This level has been resistance over the past two days and will probably continue to be resistance in the short-term. If they head lower, there should be support around the $260 level because it is where the lows were from February through May. Remember that bottoms are always more volatile than tops. That’s because selling is driven by fear and buying is driven by hope. They are oversold and have had huge volume trading, so they are probably close to the end of the recent selloff.


S&P 500 Volume – The extremely large volume that we have seen over the past few weeks could be a signal that we are at or close to a bottom. It is similar to the volume that traded in February when the market found a bottom around the same levels that it is at now.

Technology – The XLKs broke support around the $68.60 level.  There was support at this level because it is where the lows were in May and June.  There will probably be some resistance there in the short-term.  This sector is 28% of the S&P 500 makeup.

Financials – The XLFs seem to have found support around the $25 level.  This level was resistance in March and July / August of 2017.  It is also important psychologically.  They are now oversold.  If they rally there will probably be some resistance around the $26.40 level  because this level was support in June and again in early October.  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 – As expected, the XLVs found support around the 85.50 level.  There is support at that level because it was resistance in February and March, and support in July.  They are oversold so it is probable that we will see a rally or at the very least a consolidation.  I am watching this for a potential long trade.  The setup is being oversold and at support and the trigger would be a break of the downtrend line.  This sector is 14% of the S&P 500.

Consumer Discretionary – The XLYs broke support around the $107 level.  There was support at this level because it was resistance in March and February.  It has now become a resistance level again.  If they head lower there will probably be support again around $98.50 because it was the bottom of the range earlier this year.  This sector is 13% of the S&P 500.

Industrials – The XLIs broke support around the $71 level.  This level was the low at the end of last year and again in May and June.  It will now probably be a short-term resistance level.  They are still in a downtrend but they are oversold.  This sector is 10% of the S&P 500.

Consumer Staples – The XLPs are consolidating above the important $53.50 level.  The action has been unusual.  It shows that money is flowing into this sector because it is a defensive play.  People will always need staples regardless of how the markets are doing so this shows bearish sentiment for the overall markets.  $53.50  is an important level because it was support in February and March, and resistance in April.  It was also the bottom of the range since August before it was broken.  Longer-term, if they head lower there will most likely be support around the important $50 level.  This sector is 7% of the S&P 500.

Consumer Staples Long-term – 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 past May.

Energy – The XLEs are very oversold and trading at levels that were support in February, March, and April.  They will probably rally, or at least consolidate.  This sector is 6% of the S&P 500.

Energy Long-term – The $78 level is an important long-term resistance level for the XLEs.  They failed there once again last month.

Materials – The XLBs broke support around $53.50.  There was support there because it was resistance in the first half of 2017, and support in the second half.  It will now probably be a resistance level.  This sector is 3% of the S&P 500.

Utilities – The XLUs have been trending higher since they found support again around the $52 level.  This is where the lows were in July.  They have broken their uptrend.  If they eventually break $52 and 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.