Saturday, August 14, 2010

SPDR Sector Review/Preview August 14, 2010

From last night's Macro Week in Review/Preview we see that a rising volatility index combined with that stronger dollar should continue to press stocks lower next week. How does that play out when looking at the individual market sectors? Lets take a look.

Materials Select Sector SPDR, XLB

It fell out of the 32.20 to 33 range this week and below the 100 and 200 day SMA. Now it is seeking support at 30.61 the 50SMA with 29.50 below that. Resistance is at SMA's then the channel bottom at 32.20.

Energy Select Sector SPDR, XLE

It is seeking support at what has been a key area between 52.90 and 53.40 with the 50 day SMA there to help. If it holds then the 54.50 gap area and the 100 and 200 day SMA's above are resistance. Support can be found lower at 51ish then 50.25.

Financials Select Sector SPDR, XLF

It is looking to test the bottom of the recent range at 13.85 for support. If that fails then the long term R/S line at 13.55 is the next support. On a bounce resistance can be found at 14.44, the day 50 SMA and 200 day SMA then the top of recent range at 15.05.

Industrials Select Sector SPDR, XLI

It lost the 100 day SMA this week and is now on support of both the 50 day and 200 day SMA's. Failure here sees the next support at the 27.75 area before 26.80. Resistance on a bounce can be found above 29.50 at 30.19.

Technology Select Sector SPDR, XLK

Holding near support at the 21.19-21.30 area with support lower on a breakdown at 20.75 then 20.25. Resistance on a bounce can be found at 21.68 then the SMA convergence area 22.08-.25 and 22.50.

Consumer Staples Select Sector SPDR, XLP

Lost the recent uptrend line near the 100 day SMA and the support of the 200 day SMA this week. It regained the 200 day SMA after tagging the 50 day SMA later in the week and is now looking to hang on. Failure here sees support at 26.56 then 25.90 before the 25.25 area. Resistance on a bounce is found at 26.94 then 27.30.

Utilities Select Sector SPDR, XLU

The Utilities SPDR was knocked off the top but is finding support at the 30.35-30.72 range, with the RSI turning higher again. Resistance above is at 31 then the recent highs at 31.45. Support below comes at the SMA's 29.47-29.75. This sector is still the strongest.

Health Care Select Sector SPDR, XLV

The 100day SMA drove this lower to support of the 50 day SMA this week, near the 29.28-.38 area. It looks to be flagging before another move. A push through the 50 day SMA leads to support at 28. A bounce sees resistance at the 100 day SMA then 30 before then the 200 day SMA above.

Consumer Discretionary Select Sector SPDR, XLY

This looks broken. It lost the 50 and 200 day SMA's this week and could not recover. 30.50-30.75 is a big support area and failure here sees support lower at 30 then 29. Resistance above the 200 day SMA is at 31.17 then 32.32 the 100 day SMA.

In summary nothing here looks strong. Just varying degrees of weakness. Some are sitting on key support levels but the other indicators are showing weakness as opposed to strength. If I had to pick the strongest sector I would still go with the Utilities. Consumer Discretionary, 2/3 of GDP, looks the weakest. That does not bode well for the market in general. Utilities will not lead the market to new highs. Get ready for at least a little more downside. Trade'm well.

No comments:

Post a Comment