Consumer Discretionary, Technology Sectors Set New Highs

Each sector of the S&P 500 has its own ETF with 1 is rated Underweight, 2 rated Equal-Weight and 8 rated Overweight.

The technology sector remains the leader up 12.1% year to date followed by consumer discretionary up 11.4% and energy up 6.2%. The biggest loser is consumer staples down 10.7% year to date but was upgraded to equal-weight. Utilities are the underweight sector with a decline of 7.6% year to date. Transports are up just 3.1%. All other sectors are between down 1.2% and up 2.9% year-to-date.

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 $91.24. Buy weakness to my quarterly and monthly value levels of $90.16 and $87.05, respectively, and reduce holdings on strength to my semiannual and annual risky levels of $111.63 and $113.66, respectively.

Materials Sector SPDR Fund (XLB) – Overweight

Buy weakness to my semiannual value level of $56.21 and reduce holdings on strength to my monthly and quarterly risky levels of $61.12 and $62.13, respectively. My annual pivot remains at $59.99.

Industrial Select Sector SPDR Fund (XLI) – Overweight

Buy weakness to my semiannual value level of $71.16 and reduce holdings on strength to my monthly, quarterly and annual risky levels of $78.66, $78.98 and $79.31, respectively.

Consumer Discretionary Select Sector SPDR Fund (XLY) – Overweight

Buy weakness to my quarterly and semiannual value levels of $100.55 and $97.61, respectively, and reduce holdings on strength to my monthly risky level of $113.41. My annual pivot is $107.96.

Consumer Staples Select Sector SPDR Fund (XLP) – Equal-Weight

Buy weakness to my weekly value level of $47.98 and reduce holdings on strength to my monthly, quarterly, semiannual and annual risky levels of $52.61, $54.88, $60.75 and $63.34, respectively.

Energy Select Sector SPDR Fund (XLE) – Equal-Weight

Buy weakness to my monthly value level of $74.66 and reduce holdings on strength to my annual risky level of $88.91. My semiannual value level lags at $59.88. My quarterly pivot remains at $76.90.

Financial Select Sector SPDR Fund (XLF) – Overweight

Buy weakness to my semiannual and annual pivots are $26.69 and $26.77, respectively, and reduce holdings on strength to my monthly and quarterly risky levels of $29.70 and $30.27, respectively. The June 2007 high is $30.83.

Utilities Select Sector SPDR Fund (XLU) – Underweight

Buy weakness to my 200-week simple moving average at $48.20 and reduce holdings on strength to my monthly, quarterly, annual and semiannual risky levels of $51.08, $52.62, $54.46 and $58.60, respectively.

Health Care Select Sector SPDR Fund (XLV) – Overweight

Buy weakness to my 200-week simple moving average at $73.92 and reduce holdings on strength to my quarterly, annual and semiannual risky levels of $86.35, $88.09 and $91.42, respectively.

Technology Select Sector SPDR Fund (XLK) – Overweight

Buy weakness to my quarterly, semiannual and annual value levels of $67.07, $61.66 and $60.55, respectively, and reduce holdings on strength to my monthly risky level of $73.80.

iShares Transportation Average ETF (IYT) – Overweight

Buy weakness to my semiannual pivot at $188.79 and reduce holdings on strength to my monthly and annual risky levels of $199.90 and $204.61, respectively. My quarterly pivot is $195.90.

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