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Solid continuation but Tuesday turned out to be another solid day for the Tech-leaning sectors and the NASDAQ 100 index.  Yesterday I showed a list of the 11 sectors of the S&P 500 and their headings on the RRG Graph, where the sectors with a “Northeast” heading were showing the most strength. As you may recall, those were: Consumer Discretionary (XLY), Technology (XLK), Industrials (XLI), Financials (XLF), and Communication (XLC).  Today, for a day that saw a positive move in the S&P 500, there were 5 sectors that closed lower – none of which were on the “Northeast” list from yesterday.  Additionally, there are now two additions to the South-bound direction: Health Care (XLV) and Utilities (XLU).  Seeing the Health Care sector get hit today wasn’t too surprising with the news that there is a potential for drug prices to be capped.  Top stocks in the XLV ETF are names like:  Eli Lilly, Johnson & Johnson, Abbott Labs, Merck, etc.  Health Care (XLV) already looked ugly But the Health Care (XLV) chart already looked ugly. If you got hit by that one today, you weren’t paying attention. The “don’t buy” signs have been present and plentiful.  The current price for XLV has been solidly under the 200-day simple moving average since mid-March. Directional Movement has shown Red over Blue since mid-March. Directional Movement has become one of my go-to indicators since going through the CMT program. And the RRG Trend bars have also shown orange or red since mid-March.  While there was a nice attempt at a break above the mid-April highs, that attempt promptly failed on the first of May. Seeing higher-highs and higher-lows tend to be a good sign, but that ultimately didn’t work out for XLV. Going back to my comment from Monday regarding XLV on the…

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Filed under: News - @ May 14, 2025 6:26 pm