Recent Articles in Sector Review

XLV is turning into a market leader.

SPY tested the 240-area, where we got slight buy signals. This rally has relieved the oversold and provided a breadth surge. New Highs/New Lows has improved, but sentiment remains a concern and the odds of a retest are higher than most think.

Our Over Weights are now XLF and XLV. These are both strong accumulation models. XLF is now stronger than XLI, our previous overweight, and it has recovered well from the break of 25-area support.

SPY hit the bottom end of our target range at 290. Now, the forecasted pullback and retest are still underway. Last month we thought this was ending, but it has continued, and until %Bears and New Highs/New Lows improve we will remain defensive.

Our Over Weights are now XLI and XLV. These are both strong accumulation models, and XLI is a reasonably strong chart. XLV is turning into a market leader.

Sector Weight Notes: We move XLB and IYW to Equal Weights. We have not made a decision on changes to this report in response to the new XLC.

Sector Weight Notes: No changes in this report. Please read this section for important discussion on the impending sector changes.

Tech is looking tired, and we are concerned that the impending Communications Sector (XLC) is going to have an effect on IYW as well.

SPY is up around three points since the last Sector Review in June, while the first half of 2018 was quite choppy. Improved performance of MDY and IWM suggest more upside is likely from this area, international political turmoil notwithstanding.

We are forecasting a rally into the end of July, and after a pullback there we may revisit sector weights.

SPY is up around two points since the last Sector Review, and February and March were both down months. Improved performance of MDY and IWM suggest more upside is likely from this area, international political turmoil notwithstanding.

We continue with XLI and XLB as overweights. XLI still has the strongest accumulation model of any sector and remains an unpopular choice. We think that growth could come from the Industrial sector in 2018, particularly if there are infrastructure renewal measures.

XLV is a consolidation after a breakout that looks like a stair step up pattern. Biotech, one of our bellwethers for XLV, has improved.

IYW pulled back more than some of the other sectors but has rebounded strongly so we move it to an Equal Weight in spite of continued concerns.

XLU made a short-term peak, but we continue to believe dividend stocks will do better than bonds for the next six months and it is oversold. We would buy it here for traders or income investors.

SPY is up around ten points since the last Sector Review, and at new highs. Small Cap has consolidated and may be ready to stage an advance into the beginning of 2018. It looks like our forecast for a strong end to 2017 is on track.

SPY is up around three points since the last Sector Review, and near new highs. Perhaps Small Cap has consolidated and may be ready to stage an advance into yearend. It looks like our forecast for a strong end to 2017 is on track.

IYW and IYZ are under weights. IYW has been extended for some time. The risk is that the “FANG Stocks” are moving from strong to weak hands and could do badly for a while. In a strong advance, it should move up but we think it will be less than SPY and stronger sectors. IYZ continues weak but could also rally a bit in a strong yearend advance.

XLE is testing support, and oil looks like a bottom. While XLE is not reflecting this strength so far, it should into yearend.

We continue with XLI and XLB as over weights. XLI still has the strongest accumulation model of any sector, and remains an unpopular choice.