Quick Sector ETF Charting for August 26

Aug 26, 2013: 11:35 AM CST

In a follow-up to this morning’s “Planning the Daily and Weekly S&P 500 Chart,” let’s add a quick glance at the current state of ETF relative performance to highlight the two top and two bottom Sector ETFs in terms of performance.

Here’s the broader picture chart (click to enlarge):

Sector Rotation Amex Sector SPDR performance ETFs

The purpose of this chart is to get a quick glance of AMEX Sector ETF (exchange traded fund) performance relative to the May 2013 peak (comparing current price relative to the mid-2013 peak).

What we want to see is the top two performing sectors along with the bottom two sectors.

In percentage or even visual comparison terms, only two Sector ETFs are currently trading above their mid-2013 High:

  • XLI Industrials (up roughly 1.6% from the May high)
  • XLY Consumer Discretionary (up just over 1% from its May high)

With that same type of logic, the two worst performing sectors relative to their mid-2013 high are as follows:

  • XLP Consumer Staples (down 5% from its prior high)
  • XLU Utilities (down 9% from its 2013 high)

For those wanting to buy strong stocks in strong sectors in a rising stock market, continue to focus on the top performing sectors which continue to be Industrials and Consumer Discretionary.

I know it’s tempting to buck a trend and find a bottom, but try to avoid stocks – especially weak stocks – in the Staples and Utilities sector.

As we’ve seen from many cases including a recent example in GameStop (GME), stocks (and sectors) that are strong continue to get stronger as money flows into them and they outperform the broader market along with other sectors in terms of relative strength.

Join fellow members to receive daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education (free education section), and timely analysis.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

Comments Off on Quick Sector ETF Charting for August 26

Comments are closed.