S&P 500 SECTOR SPDRS PREVIEW - SPY XLK XLF XLV XLY XLI XLP XLE XLB XLU
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 Gann Theory, Harmonic Patterns, 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 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 – The SPYs ran into resistance right around the $280 level. There is resistance at this level because it was resistance in February, March, June and last month, and it was support in July. There has been support around the $270 level. There is support there because it is where the lows were in May and June. These levels will probably continue to be resistance and support in the short-term.
S&P 500 YTD – If you want the be a successful trader, you need to understand where the important levels are. For example, the SPYs just ran into resistance around the $280 level. There is resistance at this level because it was resistance in February, March, June and last month, and it was support in July. There is support at the $270 level because it is where the lows were in May and June. The SPYs recently found a bottom right at the $260 level. There was support there because it is where the lows were from February through May.
Technology – The XLKs ran into resistance around the $71 level. There is support around the $68.60 level because it is where the lows were in May and June. There will probably continue to be resistance and support at these level in the short-term.
Financials – The XLFs are back above the $27 level. It has been support over the past few days and it was support from March through June. If this level breaks it could be an indication that the broader markets will head lower.
Financials Two Year – The XLFs recently found support around the $25 level. This level was resistance in March and July / August of 2017. It is also important psychologically.
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 last month. There was support at this level because it was resistance in February and March, and support in July. They are trading above the $92 level which was an important level because it was the top in January and support in September. However, this level‘s importance has diminished but it still may provide some support in the short-term.
Consumer Discretionary – The XLYs are trading just above the $110 level. There is support around this level because it was resistance in June, support in August, and resistance again in October.
Industrials – The XLIs broke their recent downtrend and resistance 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 support level. They have been consolidating.
Consumer Staples – The XLPs are trending higher. This could be a bearish dynamic for the broader market. If they head lower they will probably find support around $53.50. $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 from August through October. Longer-term, if they head lower there will most likely be support around the important $50 level.
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 found support around the same levels that were support in February, March, and April. The $66.50 level will probably continue to be support in the short-term, and there will probably be resistance around the $72 level. This is where the bottom was in August and September.
Energy Long-term – The $78 level is an important long-term resistance level for the XLEs. They failed there once again last month. The $66.50 level has been important support.
Materials – The XLBs broke their recent downtrend and resistance around $53.50. There is resistance there because it was resistance in the first half of 2017, and support in the second half. It will now probably be a support level. There should be resistance around the $58 level because it was support in June, July, and August.
Utilities – The XLUs have been consolidating since they broke their recent 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.