XLU made a short-term peak, but we continue to believe dividend stocks will do better than bonds for the next six months and it is oversold. We would buy it here for traders or income investors.
SPY is up around ten points since the last Sector Review, and at new highs. Small Cap has consolidated and may be ready to stage an advance into the beginning of 2018. It looks like our forecast for a strong end to 2017 is on track.
SPY is up around three points since the last Sector Review, and near new highs. Perhaps Small Cap has consolidated and may be ready to stage an advance into yearend. It looks like our forecast for a strong end to 2017 is on track.
IYW and IYZ are under weights. IYW has been extended for some time. The risk is that the “FANG Stocks” are moving from strong to weak hands and could do badly for a while. In a strong advance, it should move up but we think it will be less than SPY and stronger sectors. IYZ continues weak but could also rally a bit in a strong yearend advance.
SPY is up around three points since the last Sector Review, and it is currently close to new highs. The SPY moved through our trigger of 241 to add money, and it looks like our forecast for a strong end to 2017 is on track.
XLV is a breakout after an extended period of under performance. Biotech, one of our bellwethers for XLV, has improved. IYW has had strong selling since the last Sector Review, and this sector has been extended for some time. The risk is that the “Fang Stocks” are moving from strong to weak hands and could do badly for a while.
In our equal weights, IYW is a crowded long and remains up, although it could suffer the most in a correction and ultimately be a “source of funds” for XLI, XLB and XLF.
The SPY has paused at 240 and may weaken from here into May, but so far this has been a sideways correction rather than a larger decline. Whichever happens, we are getting buying indications and would start to take positions for a strong second half.
XLV and IYZ remain under weights. XLV improved a lot but the chart is worse than other sectors and the accumulation model remains weak. Note that there is no Biotech in XLV, so the improvement there is not helping this area.
XLI has the strongest accumulation model of any sector, and has not been a popular choice. It is breaking out. We think that growth could come from the Industrial sector in 2017, particularly if there are some infrastructure renewal measures. XLF, of course, benefits from higher rates and the anemic rally in TLT in the face of a monthly buy signal suggests 2017 will be a tough year for bonds.
The consolidation we were looking for in December has occurred and may be about to end, as many pundits are looking for an immediate post election decline. We are looking for a rally instead.
The market advanced after the election of Donald Trump, and now should consolidate. Note that XLI, one of our over weights, is seeing a recycle on the daily stochastic without much price decline. This is a sign of strength.
The Fred Report - Sector Review November 2016The market has started to advance after the election of Donald Trump. Because of this, we raise XLF to an overweight, and lower IYZ to an underweight in the Large Cap Sector portfolios. Telecom is likely to lag given issues around ATT’s latest acquisition, and rising rates should benefit XLF, which is a short-term breakout. For now, NO CHANGES to the Small Cap Sector portfolio.The Fred Report - Sector Review October 2016SPY is down around 2 points since the last Sector Review, but the indicators still suggest our target of 223 should be struck. We begin the process of introducing XLRE, the new REIT sector, in this report, and will adjust the Sector Portfolios at the end of the month.The Fred Report - Sector Review September 2016Leadership looks to be Industrials with some moves into Materials as well. So far, income and defensive names continue to perform well, but we are alert to the possibility that this will change. XLP has slowed and is now an equal weight. IYZ may fail here – the accumulation models suggest this is the case, so although an equal weight we are cautious.The Fred Report - Sector Review August 2016XLP has slowed and is now an equal weight. At the same time, IYZ has finally broken out of a base, but is retesting the breakout. IYZ may fail here – the accumulation models suggest this is the case, so although an equal weight we are cautious.
