S&P Sector ETFs, 3 are Overweight, 4 are Equal-Weight, and 4 are Underweight

The 11 S&P sectors continue to be led by consumer discretionary, technology and health care.

Year-to-date leadership has the technology ETF in the lead up 15.1%. Health care is in second place up 14% year to date. Consumer discretionary slips from first to third up 13.7% year to date. Only technology is in bull market territory up 20.7% from its 2018 low.

Health care remains as an “inflating parabolic bubble” on its weekly chart. Consumer discretionary and technology despite leadership ended last week with weekly “key reversals”.

Industrial, energy and healthcare are rated overweight. Consumer discretionary, utilities, technology and transportation are rated equal-weight. REITs, materials, consumer staples and financials are 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) – Underweight

This ETF ended last week below its 200-week simple moving average of $92.02 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 $94.06. Buy weakness to my quarterly value level of $87.39 and reduce holdings on strength to my semiannual and annual risky levels of $102.40 and $113.66, respectively. My monthly pivot is $92.28.

Materials Sector SPDR Fund(XLB) – Underweight

This ETF is below my annual pivot of $59.99. The weekly chart is now negative with the ETF below its five-week modified moving average of $58.77. Buy weakness to my semiannual and monthly value levels of $54.12 and $53.63, respectively, and reduce holdings on strength to quarterly risky level of $64.28.

Industrial Select Sector SPDR Fund(XLI) – Overweight

This ETF is below my annual pivot of $79.31. The weekly chart remains positive but overbought. Buy weakness to my semiannual and monthly value levels of $72.37 and $71.39, respectively, and reduce holdings on strength to my quarterly risky level of $84.90.

Consumer Discretionary Select Sector SPDR Fund(XLY) – Equal-Weight

This ETF remains well above my annual pivot of $107.96 with the all-time high of $118.13 set on oct. 1. The weekly chart has been downgraded to neutral with the ETF below its five-week modified moving average of $114.64. Buy weakness to my monthly, semiannual and annual value levels of $111.47, $109.52 and $107.96, respectively, and reduce holdings on strength to my monthly risky level of $118.36.

Consumer Staples Select Sector SPDR Fund(XLP) – Underweight

This ETF remains above its 200-week simple moving average of $52.28 but is still well below my annual risky level of $63.34. The weekly chart has been downgraded to negative. Buy weakness to my monthly value level of $47.27 and reduce holdings on strength to my semiannual and annual risky levels of $59.45 and $63.34, respectively. My quarterly pivot is $54.37.

Energy Select Sector SPDR Fund(XLE) – Overweight

This ETF remains well above its 200-week simple moving average of $70.06 and well below my annual risky level of $88.91. The weekly chart remains positive with Friday’s close above its five-week modified moving average of $75.22. Buy weakness to my quarterly and monthly value levels of $72.88 and $72.47, respectively, and reduce holdings on strength to my annual risky level of $88.91.

Financial Select Sector SPDR Fund(XLF) – Underweight

This ETF remains above my semiannual pivot of $27.49 but the weekly chart is negative. Buy weakness to my annual pivot and monthly value level of $26.77 and $25.62, respectively, and reduce holdings on strength to my quarterly risky level at $32.86. The June 2007 high is $30.83. My semiannual pivot is $27.49.

Utilities Select Sector SPDR Fund(XLU) – Equal-Weight

This ETF stayed below my annual pivot of $54.46 last week. The weekly chart is neutral with the ETF above its five-week modified moving average of $53.30. Buy weakness to the 200-week simple moving average of $48.97 and reduce holdings on strength to my quarterly and annual risky levels of $54.42 and $54.46, respectively, as my semiannual pivot remains at $53.86.

Health Care Select Sector SPDR Fund(XLV) – Overweight

This ETF remains well above my annual pivot at $88.09 as the weekly chart continues to be an “inflating parabolic bubble”. XLV set its all-time intraday high of $96.06 on Oct. 1. Buy weakness to my quarterly, semiannual, monthly, annual and quarterly value levels of $92.80, $91.23, $88.09 and $86.50, respectively, and reduce holdings on strength to this week’s risky level of $95.98.

Technology Select Sector SPDR Fund(XLK) – Equal-Weight

The weekly chart has been downgraded to neutral with the ETF well above my annual value level at $60.55. XLK set its all-time intraday high of $76.26 on Oct. 3. Buy weakness to my monthly, semiannual and annual value levels of $72.79, $67.19 and $60.55, respectively, and reduce holdings on strength to my quarterly risky level of $77.77.

iShares Transportation Average ETF (IYT) – Equal-Weight

The weekly chart has been downgraded to neutral with the ETF just below my annual pivot of $204.61. Buy weakness to my monthly and semiannual value levels of $192.24 and $181.19, respectively, and reduce holdings on strength to my quarterly risky level at $221.72. My annual pivot remains at $204.61.

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