Don't Ignore This Chart!

Three Big Sectors Hit New Lows for the Year


There are nine sectors in the S&P 500 SPDR (SPY) and their weights range from 2.82% (materials) to 20.17% (technology). The technology sector is around seven times bigger than the materials sector and this means that not all sectors affect the S&P 500 the same. Looking at the charts today, I noticed that three of the nine sector SPDRs were trading at new lows for 2016. These are the Consumer Discretionary SPDR (XLY), the Finance SPDR (XLF) and the HealthCare SPDR (XLV). Together, these three account for 43% of the S&P 500.  On the close-only chart below, these three are also trading at 52-week lows. The fact that these three are the first to record new lows for the year shows relative "chart" weakness.  In other words, these three are leading on the downside. The finance sector represents the banking system and the consumer discretionary sector represents the most economically sensitive sector. It is not good to see these two sectors leading the market lower. There is a chart with the other six sectors after the jump. 

Thanks for tuning in and have a good day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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