Sector Spotlight: The Market Braces For FOMC And Earnings This Week

Market Recap For July 25th, 2022

Markets were relatively quiet to start the week, spending the majority of the day in the red, which was expected.

With the FOMC meeting this week, GDP numbers, and earnings, it’s truly hard to forecast how the rest of the week goes. However, the rally is still intact.

Yesterday’s Sector Performance

The rally in oil took Energy stocks to the top of the market.

Discretionary stocks fell to the bottom.

Five-Day Sector Performance

Discretionary still leads the past week, with Energy getting close.

Communication Services is the only sector in the red.

ETF Trade Watch

Energy Select Sector SPDR (XLE)

Consumer Discretionary Select Sector SPDR (XLY)

The rally from the June low is still in force, but a pullback is underway. Until something changes, higher prices should be expected. Traders may be looking at XLY and see the flag portion of a bull flag begin to form. This is a bullish chart pattern that could signal a continued move to the upside. For an example of what this might look like, we need not look much farther than the energy chart above.

That chart for XLE shows that after several days of the flag forming the price then shot up to continue to the move higher. With that forecast in mind, the XLY and XLE are two of the top ETFs to consider if stocks continue to move higher.