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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.

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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