Sector Spotlight: 1 To Watch, 1 To Avoid

Market Recap For July 6th, 2022

Wednesday’s forecast was for a higher move, and after a day full of next to nothing, markets pushed higher towards the end of the trading.

However, most of the gains were lost in the final hour. The rally may still be intact, but Wednesday’s close was not all that inspiring.

Yesterday’s Sector Performance

Utilities jumped back to the top of the market.

Energy was at the bottom of the pack, once again.

Five-Day Sector Performance

Staples and Discretionary are neck and neck at the top of the market.

Not surprisingly, Energy is at the bottom of the week.

ETF Trade Watch

Utilities Select Sector SPDR (XLU)

It may be too soon to say, but Utilities may be turning higher again, which would obviously favor the XLU. In the recent past, when we have had periods of consolidation (sideways price action), we have seen a rally 2-3 times. Now, as prices have had a brief period of consolidation, if XLU can push higher another rally could be in store. However, we can’t ignore the two recent sell-offs. Investors should be cautious of the price dipping below the most recent low for a continuation to the downside.

Energy Select Sector SPDR (XLE)

Oil’s persistent decline has crushed Energy stocks, and that has caused the XLE to break key support. Breaking of this price level could mean a larger downturn if the price trades below this support long enough to exhaust buyers. However, this is a support zone, meaning a breakdown of support doesn’t always mean a larger move down, but maybe a quick bounce upward.