10 of 11 S&P Sector ETFs have Overweight Ratings as September Begins

Each of 11 S&P sectors has its own ETF: 1 is rated Underweight and 10 are rated Overweight.

Year-to-date leadership has the consumer discretionary ETF in the lead up 17.1% year to date. The technology sector is second place up 15.1% year to date, but the tech sector is the only one bull market territory 10.7% above its 2018 low.

REITs, materials, industrial, consumer discretionary, consumer staples, financial, utilities, healthcare, technology and transportation are rated overweight. Energy remains 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 ended last week above its 200-week simple moving average at $91.92 and set its 2018 high of $97.69 on August 20. The weekly chart remains REITs as positive but overbought.

Buy weakness to my monthly and quarterly value levels of $88.53 and $86.40, respectively, and reduce holdings on strength to my semiannual and annual risky levels of $102.40 and $113.66, respectively.

Materials Sector SPDR Fund(XLB) Overweight

This ETF remains below my annual pivot of $59.99. The weekly chart remains positive.

Buy weakness to my monthly and semiannual value levels of $57.48 and $54.12, respectively, and reduce holdings on strength to my annual and quarterly risky levels of $59.99 and $63.46, respectively.

Industrial Select Sector SPDR Fund(XLI) Overweight

This ETF remains below its annual risky level of $79.31. The weekly chart is positive but overbought.

Buy weakness to my monthly and semiannual value levels of $75.46 and $72.37, respectively, and reduce holdings on strength to my annual and quarterly risky levels of $79.31 and $81.32, respectively.

Consumer Discretionary Select Sector SPDR Fund(XLY) Overweight

This ETF is now well above my annual pivot of $107.96 as a new all-time high of $117.44 was set on Sept. 4. The weekly chart is positive but overbought.

Buy weakness to my quarterly, semiannual and annual pivots of $110.31, $109.52 and $107.96, respectively, and reduce holdings on strength to my monthly risky level of $118.44.

Consumer Staples Select Sector SPDR Fund(XLP) Overweight

This ETF is above its 200-week simple moving average of $52.17 but is still well below my annual risky level of $63.34. The weekly chart is positive but overbought.

Buy weakness to my quarterly and monthly value levels of $51.74 and $49.03, respectively, and reduce holdings on strength to my semiannual and annual risky levels of $59.45 and $63.34, respectively.

Energy Select Sector SPDR Fund(XLE) Underweight

This ETF is still above its 200-week simple moving average of $70.23 and is well below my annual risky level of $88.91. The weekly chart remains negative.

Buy weakness to the 200-week SMA at $70.23 and reduce holdings on strength to my quarterly and monthly risky levels of $74.16 and $74.58, respectively.

Financial Select Sector SPDR Fund(XLF) Overweight

This ETF closed last week above my semiannual pivot of $27.49 as the weekly chart remains positive.

Buy weakness to my annual pivot of $26.77 and reduce holdings on strength to my quarterly risky level at $31.55. The June 2007 high is $30.83. In-between are semiannual and monthly pivots of $27.49 and $28.09, respectively,

Utilities Select Sector SPDR Fund(XLU) Overweight

This ETF tested my annual pivot of $54.46 again as a new 2018 high of $54.95 was set on Sept. 6. The weekly chart remains positive but overbought.

Buy weakness to my monthly and quarterly levels of $50.62 and $49.98, respectively, and reduce holdings on strength to my annual risky level of $54.46 as my semiannual pivot remains at $53.86.

Health Care Select Sector SPDR Fund(XLV) Overweight

This ETF remains above my annual pivot at $88.09 as the weekly chart becomes more overbought and reached the status of being an inflating parabolic bubble. XLV set its all-time intraday high of $93.11 on Aug. 30.

Buy weakness to my monthly and quarterly value levels of $89.82 and $85.48, respectively, with my annual and semiannual pivots of $88.09 and $91.23, respectively, and reduce holdings on strength to this weeks risky level of $94.01.

Technology Select Sector SPDR Fund(XLK) Overweight

The weekly chart remains positive but overbought with the ETF well above my annual value level at $60.55 and XLK set its all-time intraday high of $76.03 on Aug. 30.

Buy weakness to my semiannual and annual value levels of $67.19 and $60.55, respectively, and reduce holdings on strength to my quarterly and monthly risky levels of $74.76 and $75.83, respectively.

iShares Transportation Average ETF (IYT) Overweight

This ETF has been moving back and forth around my annual pivot of $204.61 as its weekly chart remains positive but overbought.

Buy weakness to my monthly and semiannual value levels of $196.57 and $181.19, respectively, and reduce holdings on strength to my annual and quarterly risky levels of $204.61 and $215.57, respectively.

Comments

Stories