8 of 11 S&P Sector ETFs Are Rated Underweight

REITs and Utilities are is rated overweight while healthcare is rated equal-weight.

The stock market reversal last week leaves us without any sector ETF in bull market territory. Instead we have seven sector ETFs in correction territory.

The REITs and utilities ETF are rated overweight. Healthcare is rated Equal-Weight. Materials, industrial, consumer discretionary, consumer staples, energy, financial, technology and transports are rated underweight.

Establishing weightings based up their weekly charts is the backbone of an Asset Allocation Model.

· An Underweight Sector Has A Negative Weekly Chart. A negative weekly chart shows the ETF below its five-week modified moving average with declining or oversold weekly momentum (12x3x3 weekly slow stochastic).

· An Equal-Weight Sector Has A Neutral Weekly Chart. A neutral weekly chart shows the ETF below its five-week modified moving average with rising weekly momentum, or above its five-week modified moving average with declining weekly momentum.

· An Overweight Sector Has A Positive Weekly Chart. A positive weekly chart shows the ETF above its five-week modified moving average with rising or overbought weekly momentum.

SPDR Dow Jones REIT ETF (RWR) – Overweight

This ETF is above its 200-week simple moving average of $91.91. The weekly chart remains positive with the ETF above its five-week modified moving average at $93.51. My quarterly value level is $87.39 with my monthly and semiannual risky levels at $100.17 and $102.40, respectively.

Materials Sector SPDR Fund(XLB) – Underweight

This ETF remains above its 200-week simple moving average at $51.58 after setting a new 2018 low of $50.09 on Oct. 25. The weekly chart is negative with the ETF below its five-week MMA of $54.23. My semiannual pivot is $54.12 with my monthly, annual and quarterly risky levels at $56.84, $59.99 and $64.28, respectively.

Industrial Select Sector SPDR Fund(XLI) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA of $71.71. The ETF set its 2018 low of $66.99 on Oct. 29. The ETF is below my semiannual pivot of $72.37 with my monthly pivot at $73.64 and my annual and quarterly risky levels at $79.31 and $84.90, respectively.

Consumer Discretionary Select Sector SPDR Fund(XLY) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA of $106.90. XLY is below my semiannual and annual pivots of $109.52 and $107.96, respectively, with my monthly and quarterly risky levels at $117.72 and $118.36, respectively.

Consumer Staples Select Sector SPDR Fund(XLP) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA of $55.08. This ETF held its 200-week SMA of $52.56 during the week of Oct. 12. My monthly and quarterly value levels are $54.14 and $54.37, respectively, with my semiannual and annual risky levels of $59.45 and $63.34, respectively.

Energy Select Sector SPDR Fund(XLE) – Underweight

This ETF has a negative but oversold weekly chart with the ETF below its five-week MMA of $67.57 and is below its 200-week SMA of $69.62. XLE is below my quarterly pivot at $72.88 with monthly and annual risky levels of $77.58 and $88.91, respectively. This ETF set a new 2018 low of $63.07 on Dec. 6. My quarterly value level lags at $43.74.

Financial Select Sector SPDR Fund(XLF) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA of $26.46. My annual, monthly and semiannual pivots are $26.77, $26.94 and $27.49 and my quarterly risky level at $32.86. The June 2007 high is $30.83.

Utilities Select Sector SPDR Fund(XLU) – Overweight

This ETF has a positive weekly chart with the ETF above its five-week MMA of $54.73. The 200-week SMA is $49.27. XLU is above my semiannual, quarterly and annual pivots at $53.86, $54.42 and $54.46, respectively, with my monthly pivot at $55.76. The all-time high of $57.23 was set during the week of Nov. 17, 2017.

Health Care Select Sector SPDR Fund(XLV) – Equal-Weight

This ETF has a neutral weekly chart with the ETF below its five-week MMA of $91.73. My annual and quarterly value levels are $88.09 and $86.50, respectively, with my semiannual and monthly pivots at $92.80 and $91.23, respectively, and my monthly risky level at $97.58.

Technology Select Sector SPDR Fund(XLK) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA of $68.02. My annual value level is $60.55 with a semiannual pivot at $67.19 and monthly and quarterly risky levels of $74.99 and $77.77, respectively.

iShares Transportation Average ETF (IYT) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week MMA at $189.20. My semiannual pivot is $181.19 with my monthly and annual risky levels at $201.73 and $204.61, respectively.