Consumer Discretionary, Technology Sectors Set New Highs Again Last Week

Each of the 11 sectors has its own ETF and 2 are rated Underweight, 2 are rated Equal-Weight and 7 are rated Overweight.

The consumer discretionary sector takes over the lead with a 13.6% gain year to date setting a new all-time intraday high of $112.23 on June 14. The technology sector slips to second place up 12.2% year to date setting a new all-time intraday high of $72.43 on June 13.

The industrial sector was downgraded to equal-weight. The energy sector was downgraded to underweight, and consumer staples has been upgraded to overweight.

Consumer staples and Utilities are lower year-to-date by 9.4% and 6%, respectively. Financials has been downgraded to equal-weight. Four sectors are down between 0.7% and 2.9% year to date. Three sectors have gains between 2.6% and 4.4% 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 back below its 200-week simple moving average of $91.27 and suffered a weekly ‘key reversal’. 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) – Equal-Weight

Stocks in this sector suffered from the looming trade war. 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 annual pivot of $107.96 and 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. Its weekly chart is now overbought.

Consumer Staples Select Sector SPDR Fund (XLP) – Overweight

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. It’s now just below its 200-week simple moving average of $51.71.

Energy Select Sector SPDR Fund (XLE) – Underweight

Buy weakness to the 200-week simple moving average of $71.17 and reduce holdings on strength to my quarterly pivot and annual risky level of $76.90 and $88.91, respectively. My monthly pivot is at $74.66.

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

Banks are not helped by higher interest rates and are being hurt by the unwinding of the Federal Reserve balance sheet. 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 $48.24 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 $74.03 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. The weekly chart is now overbought.

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 remains at $195.90. The weekly chart is now overbought.

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