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Materials, Industrial, Tech, Transportation Lead 11 Sector ETFs, Energy Remains In Correction

The S&P 500 is divided into 11 sectors and each sector can be traded using its own exchange-traded fund.

The technology sector ETF remains the outperformer with a gain of 25.1% and in bull market territory 32.1% above its post-election low. The weekly chart remains positive but overbought, and set an all-time intraday high of $60.60 on Oct. 13.

The healthcare sector ETF slipped last week but remains in second place up 19.6% year to date and in bull market territory up 21.8% since its post-election low.

The finance sector is the strongest sector since the election with a bull market gain of 32%, but lost ground on negative reaction to bank earnings. The financial ETF is below its all-time intraday high of $30.83 set in June 2007. The post-election high of $26.46 was set on Oct. 6.

The only sector ETF in correction territory remains the energy sector ETF, down 13.1% since its post-election high of $78.45 set on Dec. 12. Its weekly chart remains positive.

The materials and industrial sector ETFs are gaining momentum with new all-time highs set on Oct. 13 at $58.50 and $72.62, respectively.

The weekly charts for the retail ETFs show consumer discretionary positive and consumer staples negative. Consumer spending drives about 70% of the economy.

SPDR Dow Jones REIT ETF (RWR)

The weekly chart for the REIT Sector ETF ($94.52 on Oct. 13) has a positive weekly chart with the ETF just below its five-week modified moving average of $93.22. The 200-week simple moving average is the “reversion to the mean” at $89.48, last tested during the week of Feb. 12, 2016 when the average was $81.06. The 12x3x3 weekly slow stochastic reading rose to 57.41 last week up from 55.67 on Oct. 6.

Investment Strategy: Buy weakness to 200-week simple moving average of $89.48 and rising each week. My weekly pivot is $93.40. Sell strength to my quarterly risky level of $102.10.

Materials Sector SPDR Fund (XLB)

Courtesy of MetaStock Xenith

The weekly chart for the Materials Sector ETF ($58.35 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $56.46. The 200-week simple moving average is the “reversion to the mean” at $48.49, last tested during the week of July 1, 2016 when the average was $44.51. The 12x3x3 weekly slow stochastic reading rose to 86.66 last week up from 81.82 on Oct. 6 rising further above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my semiannual and monthly value levels of $56.69 and $56.47, respectively. Sell strength to my quarterly and annual risky levels are $60.49 and $61.72, respectively.

Industrial Select Sector SPDR Fund (XLI)

Courtesy of MetaStock Xenith

The weekly chart for the Industrial Sector ETF ($72.06 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $70.25. The 200-week simple moving average is the “reversion to the mean” at $57.32, last tested during the week of Jan. 22, 2016 when the average was $47.92. The 12x3x3 weekly slow stochastic reading rose to 86.11 last week up from 81.50 on Oct. 6 moving further above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my annual pivot at $70.05. My semiannual pivot is $71.83. Sell strength to my monthly and quarterly risky levels of $72.54 and $74.61, respectively.

Consumer Discretionary Select Sector SPDR Fund (XLY)

The weekly chart for the Consumer Discretionary Sector ETF ($91.22 on Oct. 13) is positive with the ETF above its five-week modified moving average of $91.22. The 200-week simple moving average is the “reversion to the mean” at $76.86. The 12x3x3 weekly slow stochastic reading rose to 50.49 last week up from 42.30 on Oct. 6.

Investment Strategy: Buy weakness to my weekly value level of $87.93. Sell strength to my quarterly, monthly, semiannual and annual risky levels of $93.41, $94.33, $96.76 and $97.00, respectively.

Consumer Staples Select Sector SPDR Fund (XLP)

The weekly chart for the Consumer Staples Sector ETF ($54.57 on Oct. 13) is neutral with the ETF below its five-week modified moving average of $54.52. The 200-week simple moving average is the ‘reversion to the mean” at $49.90. The 12x3x3 weekly slow stochastic reading declined to 23.53 last week down from 25.53 on Oct. 6.

Investment Strategy: Buy weakness to my annual value level of $46.91. Sell strength to my monthly, annual, quarterly and semiannual risky levels of $57.28, $58.03, $59.72 and $60.85, respectively.

Energy Select Sector SPDR Fund (XLE)

Courtesy of MetaStock Xenith

The weekly chart for the Energy Sector ETF ($68.14 on Oct. 13) is positive with the ETF above its five-week modified moving average of $66.62. This ETF is below its 200-week simple moving average, or “reversion to the mean” of $74.76 last tested during the week of Dec. 16, when the average was $77.65. The 12x3x3 weekly slow stochastic reading rose to 78.18 last week up from 72.06 on Oct. 6.

Investment Strategy: Buy weakness to my semiannual and monthly value levels of $63.27 and $61.77, respectively. Sell strength to my quarterly risky level of $73.95.

Financial Select Sector SPDR Fund (XLF)

The weekly chart for the Financial Sector ETF ($26.13 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $25.45. The 200-week simple moving average is the “reversion to the mean” at $20.18, last tested during the week of July 1, 2016 when the average was $17.58. The 12x3x3 weekly slow stochastic reading rose to 81.15 last week up from 74.47 on Oct. 6 moving above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my annual value level of $23.65, respectively. My semiannual, quarterly and monthly pivots are $25.60, $25.79 and $25.85, respectively. Sell strength to its June 2007 high of $30.83.

Utilities Select Sector SPDR Fund (XLU)

Courtesy of MetaStock Xenith

The weekly chart for the Utilities Sector ETF ($54.15 on Oct. 13) is neutral with the ETF above its five-week modified moving average of $53.87. The 200-week simple moving average is the “reversion to the mean” at $46.39. The 12x3x3 weekly slow stochastic reading declined to 55.10 last week down from 61.17 on Oct. 6.

Investment Strategy: Buy weakness to my annual value level of $50.72. Sell strength to my monthly, quarterly and semiannual risky levels of $56.35, $57.22 and $57.58, respectively.

Health Care Select Sector SPDR Fund (XLV)

The weekly chart for the Health Care Sector ETF ($82.42 on Oct. 13) is positive with the ETF above its five-week modified moving average of $81.53. The 200-week simple moving average is the “reversion to the mean” at $69.65. The 12x3x3 weekly slow stochastic reading rose to 78.23 last week up from 76.86 on Oct. 6.

Investment Strategy: Buy weakness to my annual value level of $78.09. My quarterly pivot is $82.58. Sell strength to my monthly and semiannual risky levels of $86.10 and $91.37, respectively.

Technology Select Sector SPDR Fund (XLK)

Courtesy of MetaStock Xenith

The weekly chart for the Technology Sector ETF ($60.50 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $58.88. The 200-week simple moving average is the “reversion to the mean” at $44.37, last tested during the flash crash of Aug. 24, 2015 when the average was $34.22. The 12x3x3 weekly slow stochastic reading rose to 92.40 last week up from 89.47 on Oct. 6 moving further above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my annual value level of $55.49. Sell strength to my quarterly, semiannual and monthly risky levels of $61.15, $61.48 and $62.25, respectively.

iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The weekly chart for the Transportation Sector ETF ($178.76 on Oct. 13) is positive with the ETF above its five-week modified moving average of $173.65. The 200-week simple moving average is the “reversion to the mean” at $150.26, last tested during the week of July 8, 2016 when the average was $132.92. The 12x3x3 weekly slow stochastic reading rose to 76.26 last week up from 69.64 on Oct. 6.

Investment Strategy: Buy weakness to my quarterly and monthly value levels of $173.93 and $173.56, respectively. Sell strength to my annual and semiannual risky levels of $182.54 and $191.56, respectively.

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