Edition 0007. 02.26.2022.

This is the weekly commentary that reviews all 11 sectors that form the S&P 500 ETF, SPY. We are looking at performance, trend, relative strength, and momentum.

We start with performance tables that allow us to track how the symbols have performed over several rolling periods of time. We can see New high/low details, as well as determine trend and momentum using quantitative measures. Here are a few notes to help you interpret the tables.

They are grouped first by family, and then sorted by performance.

Quantitatively, the general trend is determined by price in relation to its 40-week simple moving average. 1 means the trend is up. 2 means the trend is vulnerable. 3 means the trend is down.

1 = close is above the ma and the ma is up.

2 = close is below the ma and the ma is up, close is above a flat or ma that is down.

3 = close is below the ma and the ma is down.

Quantitatively, the general momentum condition is determined by a 12,26,09 Price Percentage Oscillator – think MACD. 1 means the momentum condition is positive. 2 means the momentum condition is positive but decelerating. 3 means the momentum condition is negative but accelerating. 4 means the momentum condition is negative.

1 = the oscillator is above 0 and the histogram is above 0.

2 = the oscillator is above 0 but the histogram is below 0

3 = the oscillator is below 0 but the histogram is above 0.

4 = the oscillator is below 0 and the histogram is below 0.

The ranking of closing highs and lows is as follows:

1 = 4-week closing high or low.

2 = 13-week closing high or low.

3 = 52-week closing high or low.

4 = all-time closing high or low.

The 40-week SMA of relative strength to SPY is as follows:

1 = 40-week SMA is up.

2 = 40-week SMA is same.

3 = 40-week SMA is down.

## Sector Performance Table.

__Sector performance table sorted by the 1-week rate-of-change.__

We know that last week US equities bounced. That is why the new closing lows have lessened. Regarding quantitative trend and momentum conditions, the picture remains the same. There is also no change to the direction of the sectors’ 40-week simple moving averages of relative strength.

Healthcare took the gold medal closing with a gain of 2.7%. Real estate took the silver gaining 2.64%. Utilities took the bronze gaining 2.05%. The laggards were staples, financials, and discretionary.

__Sector performance sorted by the year-to-date rate-of-change.__

__Relative performance chart. This shows the year-to-date performance of the sectors and SPY.__

From a year-to-date perspective, the picture is largely the same as energy leads and financials continue to back off. Discretionary has taken over the laggard role from Communications

## Sector Charts

#### Cyclical sectors: sectors that tend to lead as the economy expands and lag as

#### the economy contracts.

### Consumer Discretionary (XLY)

XLY finished the week in last place giving back 2.12% in value. Price closed below its still upward sloping 40-week simple moving average but below $178 which marks the October 2021 swing lows. Momentum remains accelerating to the downside below its 0-line. Below price we have $165 which marks the May 2021 swing lows and the 38.2% Fibonacci retracement of the Covid 2020 low to the December 2021 highs. Relative strength is testing support while it remains below its downward sloping 40-week simple moving average. XLY is in a downtrend.

Financials (XLF)

XLF finished the week in 10th place losing 0.31% in value. Price bounced from $37, where it has found support now 3 times, and continues to close above its upward sloping 40-week simple moving average. Momentum and relative strength continue to send mixed messages. Momentum has accelerated downwards while remaining above its 0-line and downwards sloping trendline, and momentum is still above its breakout level and downward sloping 40-week simple moving average of relative strength. Price is rangebound.

### Materials (XLB)

XLB finished the week in the 9th position and gained 0.57% in value. Price has closed below its downward sloping 40-week simple moving average for the 6th consecutive week. Momentum decelerated last week and remains just above its 0-line. Relative strength appears to be finding resistance underneath its upward sloping trendline and above its downward sloping 40-week simple moving average of relative strength. Price remains rangebound.

### Real estate (XLRE)

XLRE finished in 2nd place last week and gained 2.64% in value. Price remains above its December 2021 swing low yet has closed for the 3rd week in a row below its still upward sloping 40-week simple moving average. Momentum decelerated last week and remains just above its 0-line. Relative strength is mixed as well with relative strength testing its upward sloping 40-week simple moving average from below. XLRE remains rangebound.

#### Defensive sectors: sectors that provide goods & services that people require

#### in both economic expansions and contractions.

### Consumer Staples (XLP)

XLP moved from 1st position two weeks ago to 9th positions last week giving back 0.16% in value. After a massive flush downwards, price recovered and closed at the top of its intra-week range. Price is well above its upward sloping 40-week simple moving average. Momentum continues to decelerate as it is now testing its average line from above, but remains above its upward sloping trend lines. Relative strength continues to hold strong up its upward sloping trendline and upward sloping 40-week simple moving average of relative strength. Price is in an uptrend.

### Healthcare (XLV)

XLV finished in 1st last week gaining 2.7% in value. Price closed below its 40-week simple moving average and formed an engulfing type candle as $124.50 held as support again. Momentum has decelerated as the oscillator line moves towards its 0-line. Relative strength is breaking above its downward sloping 40-week simple moving average of relative strength and its downward sloping trendline. Price is rangebound.

### Utilities (XLU)

### XLU finished the week in 3rd position and gained 2.05% in value. Price remounted its rising 40-week simple moving average. Momentum decelerated and is looking to test its upward sloping trend line. Relative strength has found support at its downward sloping 40-week simple moving of relative strength. Price is rangebound.

#### Sensitive sectors: sectors that rise and fall with the general economy, but at

#### the same time have a sensitivity to additional factors.

### Communication Services (XLC)

XLC finished the week with a gain of 1.66%. Price has formed a hammer at its 38.2% Fibonacci retracement from the Covid 202 lows to the September 2021 high. XLC is in a downtrend and perhaps due for some mean reversion as it is very extended from its 40-week simple moving average. Momentum did decelerate, though its is decidedly negative. Relative strength did turn up last week since XLC outperformed SPY, though relative strength too is very negative and stretched to the downside marking all-time lows. Price is in a downtrend.

### Energy (XLE)

XLE closed the week with a gain of 1.22%, well above its upward sloping 40-week simple moving average but just below the 61.8% Fibonacci retracement from The June 2014 highs to the 2020 Covid lows. Momentum is looking strong above its average and upward sloping trendline. Relative strength is very, very strong above its upward sloping 40-week simple moving average and upward sloping trendline.

### Industrials (XLI)

XLI finished the week in 7th position with a gain of 0.80% in value. After a retest of the March 2021 swing low, buyers stepped in and price closed above $94 but below its downward sloping 40-week simple moving average. Momentum remains below its 0-line. Relative strength looks to continue to hold underneath its downward sloping 40-week simple moving average of relative strength. Price is rangebound.

### Technology (XLK)

XLK finished the week in 5th position with a gain of 1.25%. Price closed above $146, which was the October 2021 swing low, and above its upward sloping 40-week simple moving average. Momentum has continued sharply to the downside and is approaching its 0-line. Relative strength did break its upward sloping trendlines, though it has held its upward sloping 40-week simple moving average. Price is rangebound.

## Sector Summary Table

The quantitative positive trend has gained 2% of market cap as the sectors bounced last week. Quantitative momentum remained stable. My subjective analysis agrees with the percentage of market cap in a quantitative down trend, though shows more market cap rangebound and less market cap in a positive trend than the quantitative analysis shows.

Source for current weights: https://www.sectorspdr.com/sectorspdr/

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