SPX Sectors: XLK and XLC showing leadership
I reviewed the major markets yesterday where I went over some overview of my process and how I look at the short-term, mid-term and long-term trending. Taking a look at the 11 SPX sectors that make up the S&P 500 today. Note that the S&P 500 trending (using SPY ETF) looks like this:
Short-term Trending
The broad-based rally on Friday lifted all the sectors except for XLP which was down. Here are the Friday returns for them all:
We see again that the XLK and XLC led the markets while the others followed through as well with gains for the day.
Mid-term Trending
The daily charts again prove the point about XLK and XLC leading the way. Interesting to see XLF and XLE acting poorly. Oil prices came down so XLE not doing well is expected. And that may be a boost for the other sectors. But we do need to see XLF pick up if this truly will turn into a bullish reversal.
Long-term Trending
For short-term and even mid-term traders, the above table is a bit misleading. The weekly charts are really meant to give a long-term indication and will always have lag effects from price action. So, what this reflects is what happened over the last several weeks.
Strategy
The trending is by no means a confirmation of a bullish reversal. And the market still looks like in transition. The trending indicators above will guide my trading. So, short-term, I am long (small position) but also ready if the short-term trend reverses. If the trend continues, I will add to my long positions.