Trading Strategy – Consumer Staples Select Sector SPDR ETF

Retail giant Wal-Mart announced a $20 billion buyback before the bell and reiterated its earnings outlook for the current fiscal year. The news sent the Consumer Staples Select Sector SPDR ETF (XLP) higher nearly 1 percent.  In fact, according to our “U.S. Market Trading Map”, Tuesday’s rally indicated an impending bullish turnaround. Below is an update look at a trade in the 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 (daily)

Our “U.S. Market Trading Map” painted XLP bar in green (buy).  After a strong run of outperformance since early 2017, XLP peaked in early June at 57.36. The ETF rolled over and never looked back.  The September’s massive selloff pushed XLP below the 200-day moving average – a key technical level.  Tuesday’s rally signified…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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