Due to an across-the-board sell-off that's occurred, so far, this week in
equities, I thought I'd take a mid-week look at the 6 Major
Indices and 9 Major Sectors to see which ones have
been holding up somewhat better than the others.
From the
Daily line chart of the Major Indices shown
below, the two Indices that haven't reached their lower Bollinger Band by
today's (Wednesday's) close are the Dow Transports and Dow Utilities. They are,
however, underperforming the other four Indices in terms of performance from
July.
The 3-day
percentages gained/lost graph confirms this. The biggest losses, so far
this week, have been in the Nasdaq 100 Index, followed by the Dow 30, S&P
500, and Russell 2000.
The
Daily line chart of the 9 Major Sectors shows
that the only ones that haven't yet closed at/near their lower Bollinger Band
are Consumer Staples, Health Care, Utilities, and Financials. The only ones that
made a higher swing closing high before this latest pullback are Consumer
Staples, Health Care, and Utilities (the "Defensive" Sectors).
The 3-day
percentages gained/lost graph shows that the largest losses have
occurred in the Consumer Discretionary Sector, followed by Industrials,
Materials, Health Care, Energy, and Technology. The sectors with the least
losses are Utilities, followed by Financials, and Consumer Staples. While Health
Care has only pulled back to its mid-Bollinger Band, it is still in the first
group (the "Offensives") which has had the largest percentage losses.
In
summary, while there has been a general sell-off in the Large-Cap,
Technology, and Small-Cap Indices in a "risk-off" environment by mid-week, the
Dow Transports and Utilities have fared somewhat better, on a percentage-lost
basis. They are the ones to watch for any signs of serious weakness, which may
take them down to their lower Bollinger Band. If that happens, they may drag the
other four Indices down further below their lower Bollinger Band, which may (or
may not) hold for a day or two as short-term support. Also, since the Nasdaq 100
has lost the most, while the Russell 2000 has lost the least compared with the 4
Major Indices, they also hold the key and bear a close watch over the next
couple of days to watch for either signs of an acceleration of weakness or
evidence of stabilization or buying/short-covering.
In
addition, the Sectors to watch for any signs of serious weakening are
the "Defensive" and Financial Sectors. If that happens, they may drag the other
Sectors down further below their lower Bollinger Band, which may (or may not)
hold for a day or two as short-term support.
Finally,
it's my opinion that any further serious sell-off below lower Bollinger Bands in
all these Indices and Sectors would likely be accompanied by a general sell-off
in commodities and foreign currencies. In this regard, 80.00
seems to be the level that would need to be held by the U.S. $,
as shown on the Weekly chart below. Several intersecting
Fibonacci fanlines, the 50 sma (red), the 200 sma (pink), the 5-Year Volume
Profile POC (point-of-control), and price consolidation ranges all converge at
this 80.00 level, so it's an important level to be captured by $
bulls and held as support.
SB's DISCLAIMER: The information contained within
my posts may not be construed as financial or trading advice. Please do your
own due diligence before engaging in any trading activity.
