Sector Spotlight: Investors Wait For CPI Update

Market Recap For July 12th, 2022

Yesterday’s forecast suggested lower prices, and a likely test of S&P 3800. The benchmark index made it down to 380s before getting a last-minute bounce.

The market is winding up in a pattern that should be broken very soon. A failure to hold 3800 would tilt the odds towards a test of the bear market lows, or lower.

Yesterday’s Sector Performance

All sectors ended in the red, but Materials held up the among the sectors.

Energy stocks were at the bottom, but in light of oil’s significant drop, it could have been worse.

Five-Day Sector Performance

As we look at the last five days, Utilities are back on top, proving how the sector holds up in times of high inflation.

Discretionary stocks have fallen to the bottom, followed by Energy as sellers are in the driver’s seat.

ETF Trade Watch

Consumer Discretionary Select Sector SPDR (XLY)

Energy Select Sector SPDR (XLE)

If the market rally that started last month is the multi-month that has been forecasted, the area around yesterday’s low should hold up. However, volatility is still elevated and the market can still turn on a dime.

In that scenario, the XLY should bounce back. However, the Energy driven XLE may be heading lower independent of the stock market’s overall direction. XLE largest relies on what happens with the price of oil. If oil prices slide, expect the XLE to go with it.