Sector Spotlight: Is The Rally Stalling?

Market Recap For August 5th, 2022

Stocks dropped right out of the gate on Friday, but by mid-day a rebound took hold, and most losses were recouped.

Not much changed after Friday’s trading. Major resistances still sit right at, or just above, current levels.

Yesterday’s Sector Performance

Energy rebounded to retake the market lead on Friday.

Discretionary, which has been the leader, dropped to the bottom.

Five-Day Sector Performance

Thanks to Friday’s performance, Discretionary lost out to Tech last week.

Energy lagged most of the week, and Friday was not enough to pull it out of the gutter.

ETF Trade Watch

Consumer Discretionary Select Sector SPDR (XLY)

Technology Select Sector SPDR (XLK)

If the market intends on taking another leg higher this week, ETFs such as the XLY and XLK are clearly the top contenders to lead the way. The market closed out today a little flat signaling the rally could be losing some of its momentum. This could be a warning for traders and investors before the market makes a move lower, or it could be the calm before that next leg up. With CPI numbers coming out next Wednesday the market continue to chop around until the numbers are released.

However, if major resistances hold up, today proved that those are the same ETFs that would likely struggle, specifically the XLY.