• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock SPY Resting At Support, But Financials Are Showing Strength
Stock

SPY Resting At Support, But Financials Are Showing Strength

by January 5, 2024
by January 5, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

HAPPY NEW YEAR!!! (I guess that is still allowed on day 5 ..)

Let’s kick off the start of the new year with a quick look at the condition of SPY before we dive into some sector rotation.

Is SPY Hitting Pause Button?

As you know I use weekly charts most of the time but the chart above is the daily chart of SPY as I want to highlight the fact that the market is currently resting at, or testing if you want, a short-term support level around 467-468.

Looking at the hourly chart, we can even argue it is breaking that support area. The final verdict will become clear at today’s (Friday 5th) close.

The negative divergence, penciled in on the RSI in the chart above, suggests that a pause or setback is imminent.

If and when this break indeed materializes, I am looking at support in the 455 area as a first possible target. When support holds and we bounce up we might be seeing a small H&S formation in the making. Either way, the fact that all this is happening just shy of heavy overhead resistance around 480, causes upside potential to be limited in the near term.

This is very well visible on the weekly chart above where horizontal resistance coming off the early 2022 and the rising resistance line that marks the upper boundary of the channel are coming together, causing double resistance.

All in all, at least a small setback or pause to digest the recent rally seems imminent.

Sector Rotation

The longer-term sector rotation, as seen on the RRG above, still favors a positive outlook for SPY. The three defensive sectors; Staples, Utilities, and Health Care are at the left-hand side of the graph and traveling at a negative RRG-Heading. This is a rotation that is characteristic of a strong market in general as investors prefer more offensive sectors.

A rotation that stands out is the opposite move for Real Estate (XLRE) and Energy (XLE). But the one sector I want to highlight here is Financials (XLF).

On the weekly RRG, the XLF tail is inside the leading quadrant and heading further into it at a strong RRG-Heading.

On the daily chart, the XLF tail is inside the weakening quadrant has already curled back up, and is now heading back to the leading quadrant. This brings the daily rotation back in sync with the weekly which usually is a strong sign for further improvement against SPY.

Financials

To find individual stocks inside the Financials sector you can pull up the pre-defined RRG with all the members in XLF.

A quick way to identify an industry within the financials sector that holds potentially interesting stocks is to sort the table below the RRG on the “Industry” column (just click at the top of the column) and look at the quadrant colors. The table above shows that all banks are inside the leading quadrant. Clicking on the line of the individual stock will highlight the tail on the RRG. By using the arrow (up/dn) you can browse through the individual tails to get a better handle and find names to bring up on a price chart.

#Stay alert, –Julius

You Might Also Like
  • Trading the Swing within the Pattern: IGV Example
  • The Super Bullish to the Super Bearish
  • AAPL and TSLA Kick Off Q2 With BREAKOUTS!
  • What Higher Rates Could Mean for the S&P 500
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Watch top moments in Nikki Haley’s Iowa town hall, from torching Trump to defending recent comments
next post
SteadyOptions 2023 – Year In Review

You may also like

Speaking of AI — A Look at Our Alpha Rotation

June 15, 2023

Quit Trading Without This! Track Entries & Stops on the...

May 5, 2023

Bullish Holiday Seasonality Promises More Gains; Three Value Sectors to...

November 20, 2023

DexCom Stock Rises From the Ashes: A Breakout You Can’t...

January 17, 2025

MEM TV: Get In EARLY! These Areas Are Seeing LIFT...

March 22, 2024

Flip the Script: Defense as Your New Offensive Playbook

February 27, 2024

Long-Term Bond Rally On the Way

November 9, 2023

More from Mish’s Outlook 2024 — Gold and Silver

December 22, 2023

Options Trade Ideas YOU NEED to SEE!

December 9, 2024

Markets: Week 1, Week 2 — What’s Next in Week...

January 10, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025
    • Use This Multi-Timeframe MACD Signal for Precision Trades

      May 7, 2025
    • Judge allows lawsuit over Burger King’s Whopper ads to move forward

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,185 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against...

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Market Movements Today: Investors Rejoice as...

    November 26, 2024

    The Economic Modern Family & the...

    April 15, 2023

    Granddad Russell, Grandma Retail and Grand...

    August 2, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here