S&P 500 Sector SPDRs Preview - January 9th, 2019

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 SECTOR SPDRs PREVIEW - JANUARY 9TH, 2019


S&P 500 – After being the most oversold that they have been since 2011, the SPYs had a huge move upwards.  There should be resistance around the $260 level.  This is where the lows were early last year and again in October and November.  They will probably consolidate because despite the rally they are not overbought.


S&P 500 Long-term – From a weekly perspective, the SPYs were the most oversold that they have been since 2011.  That is why the dramatic move upwards wasn’t surprising.


Technology – The XLKs are consolidating below the important $63.50 level.  If they rally there should be resistance around this level because this is where the recent lows were in February, April, and November.

Financials – The XLFs recently found support around the same levels that were the lows in the first half of 2017.  They are consolidating around $24.  There may be significant resistance around the $25 level because it is where the recent lows were in October and it was resistance in the Spring and Summer of 2017.

Healthcare – The XLVs have acted just as predicted.  There is resistance around the $86.50 level because it was resistance in February and March and support in July and again in October.  They are not overbought so expect some consolidation.


Consumer Discretionary – As expected, the XLYs found support near levels that were resistance in 2017.  Unexpectedly, they traded right through the $98.50 level.  This level is where the lows were last February and again in April.  There may now be some short-term support at this level but its importance longer-term has probably been diminished.


Industrials – As expected the XLIs found support around the $62 level.  This is an important level because it is where the post-election rally began in late 2016.  They are currently consolidating.  Short-term, there are no clearly defined support or resistance levels.  Longer-term, there should be support again around $62.  There will probably be resistance around $71 because it was where the lows were in late 2017, and in the Spring and Summer of 2018.


Consumer Staples – The XLPs found support around the very important $50 level.  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.  They are consolidating.  There will probably be resistance around $52 because it is where the recent lows were in October. 

XLP


Consumer Staples Long-term – The XLPs found support again around the very important $50 level.  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 have broken their downtrend and are trending higher after trading with levels of volume that signaled capitulation.  If the keep trending higher there will probably be resistance around the $66.50 level.  This is where the recent resistance was and it was also support in early 2018.


Energy Long-term – The XLEs found support near levels that were the lows in early 2016.


Materials – The XLBs are trending higher after being oversold and trading with levels of volume that  indicated capitulation.  There is no clearly defined support or resistance around current levels. 


Utilities – The XLUs have broken their recent downtrend and are consolidating just above the $52 level.  There is support around this level because it was resistance last April and support in July and August.