There are two approaches to trades:
Trading isn’t easy. But trading WITH the market or a sector, whether it’s rising or falling, and not fighting the current, is certainly less difficult.
Here are screens of Sector Performance for the past week and month. Lately we’ve generally had both strong and weak sectors, but this week everything was weak, to a greater or lesser degree:
This week materials (XLB) and the financial (XLF) sectors were the weakest, each diving by over six percent. On the less weak (“relatively strong”) side, tech (XLK) was flat, while consumer discretionary (XLY) products and healthcare (XLV) were down by less than one percent. Looking at this in the context of monthly performance, we see opportunities in these numbers.
For the rolling month (past 4-5 weeks), XLK and real estate (XLRE) are the strong sectors, with tech up 6.5% and real estate up 4.8%. Combining the weekly and rolling month performance, tech held up well in the context of a weak week, showing relative strength by staying flat. As comparison, the S&P 500 (SPY) was down 2.2%, while the Dow fell 3.3%.
Look for setups Tuesday morning before the market opens!
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