Sector Spotlight: Big Week Ahead

Market Recap For July 22nd, 2022

Friday’s Spotlight forecasted higher prices, but also warned an inevitable pullback likely getting close. The market gave traders both to finish the week.

This week seems likely to start off with lower prices as markets pullback to retest prior breakout points. That pullback should lead to a resumption of the rally.

Yesterday’s Sector Performance

As is very common, when markets are weak, Utilities outperform.

Services were hit harder than most, thanks to disappointing earnings.

Five-Day Sector Performance

If readers follow these updates, Discretionary winning the week was not a surprise.

Friday knocked Communication Services down to the bottom.

ETF Trade Watch

Utilities Select Sector SPDR (XLU)

Consumer Discretionary Select Sector SPDR (XLY)

If markets do decline further this week, look for Utilities to have another good couple days, and for the XLU to push higher. Utilities haven’t been able to hide from the falling market, however, this sector has managed to retain a lot of value due to steady demand.

A market pullback should lead to another leg up, and the sectors that led before could lead after. Traders may want to keep an eye on the XLY as consumers hold strong. These levels may present traders with an excellent risk vs. reward setup.