Week 6 SPX Sectors Trending and Performance
I did the review of the SPX sectors trending on Thursday after market close. So, not much has changed since then. So, instead of commenting on the changes, I will just put the heat map from last week here. That will allow us to see the week-over-week trending change.
Current Trending Heat Map:
Trending Heat Map from last week:
We can see the differences mostly in the first 2 columns of the map.
Let us review the week-over-week performance:
Energy XLE is the big winner having gained back close to what it lost last week.
Looking at the performance over various periods:
Observations and Conclusions:
Overall trending is deteriorating for most of the sectors except for Energy XLE that had strong gains this week.
Technology was able to retain its trending. And it also had a small gain along-with the Financials XLF. Although the XLF trending deteriorated to some extent.
The XLE trending and performance is noteworthy, and I will need to see if this is a reliable trend reversal. The correlation between XLE and the S&P 500 is only 0.66. So, we could see XLE go up even as S&P 500 declines.
Actions:
I am holding short positions in XLY, XLV and XLP using put options. I will look to go long XLE to hedge those positions.