S&P 500 Sector SPDRs Preview - September 1st, 2018

S&P 500 Sector SPDR 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 SPDR Preview - September 1st, 2018 PDF

 

S&P 500 – Despite all of the recent hysteria in the news about the Turkish Lira and Trade Wars the SPYs made an all-time high this week.  They are overbought and consolidating.  If there is some profit-taking there will probably be support around the $286 level because it was resistance earlier in the year.  The next level of support will probably be around the $280 level because it has been important an important level this year.

 

Technology – The XLKs are trading at all-time highs but they are very overbought.  If they head lower there should be some support around $74 because it was the top of the recent range.  This sector is 28% of the S&P 500 makeup.

 

Financials – The XLFs continue to trade around 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.  It is important to note that they have not participated in the recent rally.  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 near their all-time highs but they are still in an uptrend.  If they head lower there will probably be support around the $91.50 level.  It was the top in January.  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.  If there is some profit taking there should be support around the $114 level because it was the top of the recent range.  There was support around the $110 level because it was the top of the range at the end of June and in early July.  This sector is 13% of the S&P 500. 

 

Industrial – The XLIs are consolidating above support 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 broke their recent uptrend and are consolidating above support at the $53.50 level.  This level was resistance and the 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 $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 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.  Short-term, there has been support around $52.  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.