Trading Strategy – Health Care Select Sector SPDR ETF

Stock prices of many of the largest health care companies fell heavily this week on the news that Amazon, JPMorgan Chase and Berkshire Hathaway would team up to create a company that would address health care for their employees.  The Health Care Select Sector SPDR ETF (XLV) fell 3.7 percent this week, bringing its YTD gains down to 6.6 percent.  The ETF gained nearly 20 percent in 2017.  Now the question is whether recent weakness is a pause that refreshes or it’s a beginning of something worse?  Below is an update look at a trade in XLV.

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. 

Chart 1.1 – Health Care Select Sector SPDR ETF (weekly)

Our “U.S. Market Trading Map” painted XLV bars in red (sell) – see area ‘A’ in the chart.  The ETF had been on a tear in recent months after the October correction found support near the 20-week moving average.  The late December rally pushed XLV up against key technical resistance at the 127.2% Fibonacci extension of the 2009-2015 upswing.  This week’s massive bearish engulfing bar is a clear indication…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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