Sector rankings are in-line with expectations. Utes holding the top spot is supported by the current chart pattern discussed below.


Market: XLF (Financials ETF)

Reason for observation: Back above potential support

Short-term bias: Neutral

Long-term bias: Bullish

Financials rallying out of the lows made in early July. Still would like to see more upside before our short-term bias can be shifted. Bears still may have a shot at new lows.


Market: XLU (Utilities ETF)

Reason for observation: Volatility contraction

Short-term bias: Bullish

Long-term bias: Bullish

This volatility contraction in context is extremely bullish. It even may suggest a potentially explosive move should bulls get the utes moving back to the upside. One to keep an eye on for sure.


Materials and industrials, two sectors with superior out-performance in 2017, have lagged severely in the summer months of 2018. Recently they have mean reverted back to the upside but this chart clearly displays how much work still has to be done.