Trading Strategy – Consumer Staples Select Sector SPDR ETF

One of the noteworthy developments in September has been the move in consumer staples.  After a strong run of outperformance in late 2016, the sector topped out in early June and trended steadily lower.  The Consumer Staples Select Sector SPDR ETF (XLP) down 1.3 percent MTD while the S&P rose 1.6 percent.  Now the question is will the sector turn around and catching up to the broader market?  Below is an update look at a trade in XLP.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red.  The yellow bars identify period of neutral or sideways trading pattern.  Additionally, the light-blue shading represents the short-term trading range.  A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading).  Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.

Chart 1.1 – Consumer Staples Select Sector SPDR ETF (weekly)

Our “U.S. Market Trading Map” painted XLP bars in red (strong sell).  After peaking at 57.36 in early June, XLP rolled over and formed a trading range between 54 and 56.  Last week’s massive selloff pushed the ETF below the 2017 rising trend line, signify…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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