The SPDR Healthcare ETF (XLV) has experienced a 15 percent correction.
LLY has formed a top, UNH broke the uptrend from 2009, JNJ has broken its uptrend and its 50-day MA.
I’m watching this sector for two main reasons. One, it looks like it could be a tripwire. If support goes, XLV will be down nearly 20 percent and testing the 2009 uptrend and 50-month MA, helpfully located in nearly the same spot. This will be one of the first sectors to signal a bear market has begun.
Two, healthcare has cheap puts. The options market is not priced for a breakdown.
Finally, if XLV can break the lower horizontal at $113, the target is the $70 area made during the March 2020 panic. Karma?
Editor’s Note: don’t blame LZ if you don’t like the post title or the saint picture. That’s my contribution.
