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SPY Price Targets & Sector Analysis

Here's a quick look as the SPY (S&P 500 Index tracking ETF) along with the four largest sectors within the S&P 500. As recently highlighted, we have YADH (yet another divergent high) in SPY with a sell signal to come on a break & close below 240.32. My minimum target is 232.50 with a potential 2nd target around 219.63.

SPY daily June 29th

SPY daily June 29th

My first target in XLK was hit today followed a slight reaction off that key uptrend line. As technology is the largest sector within the S&P 500 with a weighting of 23.2%, should that trendline get taken out with XLK moving down to any of my additional targets, the tech sector will almost certainly take the stock market down along with it.

XLK daily June 29th

XLK daily June 29th

At a 13.9% weighting in the SPX, the healthcare sector is the second largest sector, albeit accounting for just over half of the performance as technology. A break below this bearish rising wedge in XLV will likely bring prices down to the uptrend line highlighted on this daily chart in the coming weeks.

XLV daily June 29th

XLV daily June 29th

Right behind the healthcare sector comes the financials at a 13.7% weighting in the S&P 500. The recent breakout & successful backtest of the late March-June trading range in XLF can't be spun as anything but bullish. However, if my expectation for additional downside in the broad markets plays out then the financial sector will likely get dragged down with it.

XLF daily June 29th

XLF daily June 29th

XLY continues to play out as expected following the recent divergent high & channel breakdown & backtest. As one of the largest sectors in the S&P 500 with a 12.5% weighting, the Consumer Discretionary sector looks poised to drag the market lower in the coming weeks to months.

XLY daily June 29th

XLY daily June 29th

Just another reminder that I will be traveling on vacation until July 9th with limited access to emails & the trading room. I will reply to any questions or comments at my earliest convenience. This is a semi-working vacation so market analysis & trade ideas/updates will continue to be posted although updates will be less frequent until I return.

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Jun 29, 2017 5:58pm|Categories: Equity Market Analysis|Tags: , , , , , |5 Comments

5 Comments

  1. joefriday June 29, 2017 6:08 pm at 6:08 pm

    Nice review and nice calls on QQQ and SPY!

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  2. hovincent123 June 29, 2017 8:42 pm at 8:42 pm

    Randy,

    Thank you . On the SPX, the yellow line that think where it will drop to your targets I noticed it will hit your Trend line and retrace abit back before heading to your final target.
    Would you pls let me know what is value when it hits your trend line before the retrace and what is the value it will retrace to before it heads down to your final target be it the minimum or potential T2.

    Thankyou

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    • rsotc June 30, 2017 1:31 pm at 1:31 pm

      As that trendline has a positive slope (up-sloping), the values change every day. The scenario that I drew with the yellow dashed lines assumes that SPY breaks below the 230.40ish support level soon.
      If that does occur within the next few trading sessions, then SPY would likely hit that uptrend line around the 236.15 level but that’s just my best guesstimate. As I’m on vacation & only checking in on the markets periodically & sporadically throughout the day, I might not be in front of my computer when that trendline in order to post it here. However, I will let you know if I am online when/if that happens.
      If the SPY does move lower to hit that uptrend line soon AND if it bounces off the initial tag, as I suspect it will, I think there is a good chance that the bounce/retrace will take it back up to around that 240.30ish support level (which will become resistance if prices move below it).

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  3. lverne June 29, 2017 9:48 pm at 9:48 pm

    Thanks again Randy. You have a truly outstanding site with some of the most skillful TA I have seen in some time. Planning to stick around. 🙂

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    • rsotc June 30, 2017 1:34 pm at 1:34 pm

      You’re most welcome & thank you.

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