All 11 S&P Sector ETFs Now Have Underweight Ratings

There are no safe havens in the stock market when all 11 S&P sector ETFs have negative weekly charts.

There are no safe havens in the stock market when all 11 S&P sector ETFs have negative weekly charts and thus have underweight ratings. The materials, industrial and finance sectors set new 2018 lows last week.

The materials sector is now in bear market territory and industrial, consumer discretionary, energy, financial, technology and transports are in correction territory. The utilities sector set a fresh 2018 high on Oct. 24 then ended last week with a negative weekly chart. The utilities ETF has a dividend yield of 3.36%.

My Warning Continues: Reduce holdings in the stock market by at least 50%.

I have been warning about a stock market reversal since the Federal Reserve began to unwind its $4.5 trillion balance sheet. Since October 1, 2017, the Fed has flushed $325 billion down the drain. The unwinding of the balance sheet has thus been the “canary in the coal mine” and the smell of the popping stock bubbles intensified in the first three days of October when the Fed drained $18 billion. So many stocks, sectors and indices were in “inflating parabolic bubble” formations and the popping sounds have been loud and clear.

The Federal Reserve was scheduled drain $50 billion from their balance sheet in October and the first $18 billion was a problem as the month began. Last week the Fed reduced the balance sheet by just $2 billion. The balance sheet now stands at $4.173 trillion so the Fed is $30 billion behind schedule which could reflect that the FOMC is worried about the stock market.

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) – Underweight

This ETF remains below its 200-week simple moving average of $91.99 after setting its 2018 high of $98.11 on Sept. 21. The weekly chart remains negative with the ETF below its five-week modified moving average at $91.85. My quarterly value level is $87.39 with my monthly risky level at $92.28.

Materials Sector SPDR Fund(XLB) – Underweight

This ETF declined below its 200-week simple moving average at $51.42 last week setting a new 2018 low of $50.09 on Oct. 25. The weekly chart remains negative with the ETF below its five-week modified moving average of $55.64. XLB is below my semiannual pivot at $54.12 with my annual and quarterly risky levels at $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 modified moving average of $74.84. The ETF set a fresh 2018 low of $68.12 on Oct. 26. The ETF is below my semiannual pivot of $72.37 with 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 modified moving average of $110.28. XLY is below my semiannual and annual pivots at $109.52 and $107.96, respectively, with my monthly risky level of $118.36.

Consumer Staples Select Sector SPDR Fund(XLP) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week modified moving average of $53.83. This ETF held its 200-week simple moving average of $52.35 during the week of Oct. 12. My monthly value level is $47.27 with my quarterly pivot of $54.37 and 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 weekly chart with the ETF below its five-week modified moving average of $72.60 and fell below its 200-week simple moving average of $69.95 last week. XLE is below my quarterly pivot at $72.88 with my annual risky level of $88.91. 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 modified moving average of $27.07. This ETF is below my annual pivot at $26.77 with my semiannual pivot at $27.49 and my quarterly risky level at $32.86. The June 2007 high is $30.83. This ETF set a fresh 2018 low of $25.03 on Oct. 26.

Utilities Select Sector SPDR Fund(XLU) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week modified moving average of $53.47. The 200-week simple moving average is $49.06. XLU is below my semiannual, quarterly and annual pivots at $53.86, $54.42 and $54.46, respectively.

Health Care Select Sector SPDR Fund(XLV) – Underweight

This ETF has a weekly chart is negative with the ETF below its five-week modified moving average of $91.22. My annual and quarterly pivots are $88.09 and $86.50, respectively, with my semiannual and monthly risky levels at $92.80 and $91.23, respectively.

Technology Select Sector SPDR Fund(XLK) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week modified moving average of $71.77. My semiannual and annual value levels are $67.19 and $60.55, respectively, with my quarterly risky level of $77.77.

iShares Transportation Average ETF (IYT) – Underweight

This ETF has a negative weekly chart with the ETF below its five-week modified moving average of $193.97. My semiannual pivot is $181.19 with my annual risky level of $204.61. This ETF set a fresh 2018 low of $176.50 on Oct. 26.

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