S&P 500 Economic Sector SPDR ETFs Preview
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 – Despite all of the recent hysteria in the news about the Turkish Lira and Trade Wars the SPYs closed at an all-time high on Friday. If there is some profit-taking there will probably be support around the $280 level because it was resistance earlier in the year.
Technology – The XLKs are overbought and testing all-time highs. This level was the top in July. If they head lower there should be some support around the $72.50 level because it is where the recent lows were. This sector is 28% of the S&P 500 makeup.
Financials – The XLFs are testing 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 at resistance near their all-time highs but they are still in an uptrend. 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 broke out of their recent range and are trading at all-time highs. There was 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 are testing 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 consolidating after breaking resistance at the $53.50 level. This level was resistance and the most recent high in April because it was support in February and March. Longer=term, if they head lower there will most likely be support around the important $0 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 May.
Energy - The XLEs seemed to have broken support at the $74 level, but quickly rallied back. I would still watch the $74 level for support. There is resistance at the $78 level. 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. 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 around the $54 level after breaking out of their recent range. 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.