9 of 11 S&P Sector ETFs have Positive Weekly Charts as August Begins

Each of 11 S&P sectors has its own ETF: 1 is rated Underweight, 1 is rated Equal-Weight and 9 are rated Overweight.

Year-to-date leadership has been a horse race between the consumer discretionary and the technology sectors with tech in the lead with a 13.7% year to date versus 13.3% for discretionary. The REITs sector was the only one to set its 2018 high and did so on Friday.

REITs, industrial, consumer discretionary, consumer staples, financial, utilities, healthcare, technology and transportation are rated overweight. Materials is rated equal-weight. Energy is 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 of $91.66 and set its 2018 high of $95.54 on August 2. The weekly chart still shows REITs as positive but overbought.

Buy weakness to my monthly and quarterly value levels of $86.50 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) – Equal-Weight

This ETF remains below my annual pivot of $59.99. My monthly risky level of $58.83 was tested as August began.

Buy weakness to my semiannual value level of $54.12 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 well below its annual risky level of $79.31. My semiannual pivot of $72.37 held on weakness three weeks ago.

Reduce holdings on strength to my monthly, annual and quarterly risky levels of $76.26, $79.31 and $81.32, respectively.

Consumer Discretionary Select Sector SPDR Fund (XLY) – Overweight

This ETF remains above my annual pivot of $107.96 as a new all-time high of $113.57 was set on July 27.

Buy weakness to my semiannual and annual pivots of $109.52 and $107.96, respectively, with my quarterly pivot of $110.31. Reduce holdings on strength to my monthly risky level of $115.16.

Consumer Staples Select Sector SPDR Fund (XLP) – Overweight

This ETF is now well above its 200-week simple moving average of $51.97 but is still well below my annual risky level of $63.34.

Buy weakness to my quarterly and monthly value levels of $51.74 and $50.51, 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 above its 200-week simple moving average of $70.51 and is well below my annual risky level of $88.91.

Buy weakness to my quarterly value level of $74.16 and reduce holdings on strength to my monthly and annual risky levels of $77.85 and $88.91, respectively.

Financial Select Sector SPDR Fund (XLF) – Overweight

This ETF closed last week above my semiannual pivot of $27.49.

Buy weakness to my annual pivot of $26.77 and reduce holdings on strength to my monthly and quarterly risky levels at $28.30 and $31.55, respectively. The June 2007 high is $30.83.

Utilities Select Sector SPDR Fund (XLU) – Overweight

This ETF remains below my annual risky level of $54.46.

Buy weakness to my quarterly and monthly value levels of $49.98 and $46.38, respectively, and reduce holdings on strength to my semiannual and annual risky levels of $53.86 and $54.46, respectively.

Health Care Select Sector SPDR Fund (XLV) – Overweight

This ETF has moved above my annual pivot at $88.09 as the weekly chart becomes more overbought.

Buy weakness to my monthly and quarterly value levels of $85.93 and $85.48 and reduce holdings on strength to my semiannual risky level of $91.23.

Technology Select Sector SPDR Fund (XLK) – Overweight

The weekly chart remains overbought with the ETF well above my annual value level at $60.55 with a new monthly pivot at $72.31.

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

iShares Transportation Average ETF (IYT) – Overweight

This ETF remains well below its annual risky level of $204.61 with a new monthly pivot at $199.04.

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

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