1 Sector Every Trader Should Watch, 1 To Avoid
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ETF Trade Watch
As with any market breakout, you would hope to see certain sectors rally while others subside. To this point, Technology and Discretionary lead last week, which is what you would expect to see in a bullish run like the one we have been on leading up to this week. Other sectors continue to lag, however, rather than putting a damper on our hopes for a continued rally, these are the sectors you would expect to fall behind in a situation like this.
Consumer Discretionary Select Sector SPDR ETF (XLY)
One sector we are watching closely with be the XLY, which appears to be on the cusp of a key breakout. The level to watch on this sector ETF is highlighted in the video below. This level has demonstrated many times in the past that the price reacts to it fairly significantly. Several touches of this level in the past should make any trader pay close attention as the price nears this level yet again.
Health Care Select Sector SPDR ETF (XLV)
Health care is one of those areas of the market that tends to fall behind when the rest of the market rallies like this. Should the rally continue on pace, this will be one sector you will want to stay away from going long on. As investors flood to the higher risk, higher return assets, this area of the market will wither on the vine. For now, if you do not have a solid plan for going short any particular levels on this sector, it is best to avoid going long for the time being.
If you want to join my students and I as we learn how to look at sector ETFs for our trades then you’ll want to become a member of my Smart Trades options trading service. Not only will you get all my trades, but you’ll also be a part of a growing community of like-minded traders looking to learn and hone their options trading skills.
I look forward to trading with you, but until then, as always…
