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Sector Spotlight: One Sector Continues To Soar, While The Other Sinks

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Market Recap For August 4th, 2022

Markets didn’t make much headway, up or down, yesterday. The S&P failed to take 4160 again, as the Nasdaq inched a little higher.

The most recent leg of the rally seems a bit extended, and with the indices sitting at, or near key resistances, a pullback would seem to be close.

Yesterday’s Sector Performance

Once again, Tech and Discretionary led the market.

Energy was at the bottom for the second day in a row.

Five-Day Sector Performance

Discretionary is the weekly leader, as it has been for a while now.

Energy is the clear market laggard, distances from all others.

ETF Trade Watch

Energy Select Sector SPDR (XLE)

Sure enough, oil extended its decline, as forecast in yesterday’s issue. The drop doesn’t seem to over, so look for the XLE to fall further. Also, continue to keep your eyes fixed on the price of oil, as a sharper decline would drag this sector down with it.

Technology Select Sector SPDR (XLK)

Technology is still a top performer, and if the market rally can keep running, the XLK should hit more recovery highs as well. Tech stocks have been strong over the past couple weeks of this market rally. Investors and traders are both helping themselves to the gains made in this area od the market. Oftentimes, technology as risk assets outperform when the market is rallying and take a larger hit when it is in decline. Keep this in mind as market dynamics shift.

Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group. My Chartered Market Technician (CMT) designation substantiates me as an expert in areas such as the technical analysis of stock trends, market indicators, cycles, price patterns, Elliot Wave principles, Candlestick charting, analyzing financial trends and behaviors, portfolio strategies, and forecasting future price movements. With my straightforward approach to simple, systematic trading, students learn how to strategically assess buy signals and market entry timing, establishment and management of stop losses, and how to employ a simple and disciplined trading approach that creates profits.

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