The Technology Sector Leads, But Suffered A ‘Key Reversal’

Richard1944

It’s tough to be bullish on stocks when only two have positive weekly charts. The fact that technology suffered a daily ‘key reversal’ and with utilities going positive is a warning that investors are shifting from momentum stocks to dividend stocks.

The ‘key reversal’ for the tech sector ETF occurred on March 13 as XLK set an all-time intraday high of $71.34 then closed below the March 12 low of $70.53.

The S&P 500 is divided into 11 sectors and each sector can be traded using its own exchange-traded fund.

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) – Equal-Weight

Buy weakness to this week’s value level of $83.82. Reduce holdings on strength to my monthly risky level of $88.22.

Materials Sector SPDR Fund (XLB) – Underweight

Buy weakness to my semiannual value level of $56.21. My annual pivot is $59.99 remains a magnet. Reduce holdings on strength to my quarterly pivot and monthly risky level of $61.62 and $63.48, respectively.

Industrial Select Sector SPDR Fund (XLI) – Underweight

Buy weakness to my semiannual value level of $71.16. My quarterly pivot is $77.57. Reduce holdings on strength to my monthly and annual risky levels of $79.11 and $79.31, respectively.

Consumer Discretionary Select Sector SPDR Fund (XLY) – Equal-Weight

Buy weakness to my semiannual and quarterly value levels of $97.61 and $95.98, respectively. My monthly pivot is $104.68. Reduce holdings on strength to my annual risky level of $107.96.

Consumer Staples Select Sector SPDR Fund (XLP) – Underweight

Buy weakness to the 200-week simple moving average at $51.31 and rising each week. Reduce holdings on strength to my monthly, quarterly, semiannual and annual risky levels of $54.99, $58.49, $60.75 and $63.34, respectively.

Energy Select Sector SPDR Fund (XLE) – Underweight

Buy weakness to my semiannual value level of $59.88 and reduce holdings on strength to my monthly, quarterly and annual risky levels of $71.90, $78.32 and $88.91, respectively.

Financial Select Sector SPDR Fund (XLF) – Equal-Weight

Buy weakness to my quarterly, annual and semiannual value levels of $27.20, $26.77 and $26.69, and reduce holdings on strength to my monthly risky level of $29.81 and its June 2007 high of $30.83.

Utilities Select Sector SPDR Fund (XLU) - Overweight

Buy weakness to my weekly value level of $48.52, and reduce holdings on strength to my monthly, annual, semiannual and quarterly risky levels of $53.55, $54.46, $58.60 and $59.24, respectively.

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

Buy weakness to my quarterly value level of $79.35 and reduce holdings on strength to my monthly, annual, semiannual pivots are $86.66, $88.09 and $91.42, respectively.

Technology Select Sector SPDR Fund (XLK) – Overweight

Buy weakness to my quarterly, semiannual and annual value levels of $63.59, $61.66 and $60.55, respectively, and reduce holdings on strength to my monthly risky level of $72.08.

iShares Transportation Average ETF (IYT) – Equal-Weight

Buy weakness to the 200-week simple moving average of $156.2 and rising each week. My semiannual pivot is $188.79. Reduce holdings on strength to my quarterly and annual risky levels of $194.69 and $204.61, respectively.

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