SECTOR ANALYSIS:
XLY - Consumer Discretionary - No change from what was discussed last week. "This sector is sitting at a support level on both the daily and weekly timeframe. Additonal downside could come but it is not significant. I found this very interesting considering the downside experienced during the course of this week. Bullish trades can certainly be taken and offer a very low risk to reward ratio."
XLP - Consumer Staples - We closed below 26.25 and is now generally bearish. We could get some move up from here so that bearish trades can be taken from a low risk perspective.
XLE - Energy - We closed below 54.50 and I am now looking for some moves up to be able to take some additional bearish trades. Watching for around 56 before I will feel really comfortable going bearish.
XLV - Healthcare - Healthcare has now formed a lower high and a lower low. I will be looking for a move up to the 31.50 area to find some viable shorts in the sector.
XLB - Materials - I am now looking for a move up to around 31 to initiate some bearish trades. Few trades will be taken in that direction as I am still long the dollar and the trades are highly correlated.
XLF - Financials - We closed below 14 so I am awaiting the move up to initiate bearish trades in this sector as well.
XLI - Industrials - This sector still has some potential bullish potential as we have not violated critical rising long term diagnonal trends. We touched it this last week but did not break. We can fall futher but the bullish trend of this sector has not broken. The sector is not in a short term bullish trend at this time as we have formed lower highs and lower lows howerver. Not much to do in this sector for right now.
XLK - Technology - Very much the same as the other sectors. Expecting an increase to the 21.25 level before beginning to intiate bearish trades in the sector.
XLU - Utilities - This sector very much has broken. Any sign of bullishness and trades to the downside will be taken in this sector. 29.50 is the next level of support/resistance. That is what I wrote last week and we ended at 29.53. We can still fall to 29.25 and be within the support/resistance window. I am still looking for some bullishness to initiate bearish trades. Based on the weekly charts we should be expecting a fall closer to 28. This is based on Fibonacci retracement analysis. We are forming something of a bull flag on the weekly chart so this should be kept in mind if trades are initiated.
Charts are still indicative of bearishness but we should get some relief during this week so that we can truly take advantage of the bearishness. I am still watching the QID and will be continuing to use the signals to trade that symbol. The only real bullish trade that I have right now is in PETS and TEVA. All others closed this last week. I am short the DIA and CAT. I will close the CAT trade on a close above 55.