S&P 500 Sector SPDR Preview - October 7th, 2018

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 7TH, 2018 PDF

S&P 500  Short-term – The SPYs have broken their recent uptrend and may be starting to trend lower.  As expected, there is support around $286   Trendlines aren’t magical and mystical.  They are simply graphical pictures of the supply and demand dynamics that are occurring in a market.  In this case the forces of demand have been in control.  The break of the uptrend line illustrates that the forces of supply are overcoming, or at least equalizing with, the forces of demand.

S&P 500  – After making an all-time high on September 18th, the SPYs have broken their recent uptrend and may be starting to trend lower.  There is support around the $286 level because it was resistance earlier in the year.  It was also support at the beginning on September.  The next level of support will probably be around the $280 level because it has been an important level this year as well.

Technology – After becoming very overbought, the XLKs broke their recent uptrend and support around the $75 level.  As expected, they found support around the $73 level.  This level is where the recent lows were.  They are oversold now.  This sector is 28% of the S&P 500 makeup.

Financials – After some very unusual action, the XLFs are right back in the middle of the range that they have been in since July.  If the head lower, there may be support around the $26.80 level because this is where the recent lows earlier this year.  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 broken their recent uptrend after making new all-time highs.  If they head lower there should be support around the $92 level.  It was the top and an all-time high in January and support in late August and early September.  This sector is 14% of the S&P 500.

Consumer Discretionary – The XLYs have been in a free-fall over the past week. There was support around the $110 level because it was the top of the range at the end of June and in early July.  There will probably be support there again if they head lower.  This sector is 13% of the S&P 500.

Industrials – The XLIs are consolidating just under resistance at the $80 level.  There is resistance around these levels because they were the highs in January.   If they head lower there will probably be support around $76.50 because it was the top of the range from May through August.  This sector is 10% of the S&P 500.

Consumer Staples – The XLPs are testing support around the $53.50 level.  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 trending higher but they are near levels that have been important resistance in the past.  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 are testing support around $58, which has been the bottom of the range since June.  This sector is 3% of the S&P 500.

Utilities – The XLUs have been rallying since they found support around the $52 level.  This is where the lows were in July.  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.