The HealthCare SPDR (XLV), Consumer Staples SPDR (XLP) and Utilities SPDR (XLU) are lagging the broader market in 2016, but they are now challenging their 200-day moving averages with bounces this month. The chart below shows these three sectors peaking in July-August and moving lower the last four to five months. Despite weakness since summer, these three bounced in December with staples and utilities leading the nine sectors this month. At this point, I would consider this a bounce within a downtrend because we have yet to see resistance breaks. The lower windows show XLU and XLP trading near resistance levels marked by the recent peaks and the 200-day SMAs. The top window shows XLV just below its 200-day. These three are clearly at a moment-of-truth. Breakouts above the resistance zones would be bullish, while failures would keep the downtrends intact.
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