Anticipating the Bullish Cycle in SPY XLF and XLY Will Continue Into August
The S&P500 SPY, consumer discretionary (XLY) and retail stocks continue to accelerate higher as the current bullish cycle unfolds. Financial stocks are reporting earnings as well, boosting pre-market activity this morning.
Summary
Bullish Cycle SPY
SPY began its turn higher two weeks ago. The current cycle was led higher by price, which is currently above resistance levels North of 278.23. If SPY continues along this path, it will be trading in an area of diminishing supply.
Most of the SPDR sectors are heading higher as well. Financial (XLF) stocks are active this morning, which should assist SPY in gaining higher ground this week, barring any negative catalysts from the media.
Consumer Discretionary (XLY)
Retail and the consumer discretionary stocks tend to perform well during the month of July, then begin to taper into August and September. After the late summer dip, these stocks usually regain their footing and rise into the holidays, as spending increases dramatically for the year,
FIVE and ROST are on the watch list for the week, as we anticipate a tailwind from consumer spending going forward. Reference the notes therein for specifics on these potential candidates.
SBUX is an existing position where we are anticipating a follow through for the week.
S&P Futures (ES) are flat this morning. Nasdaq (NQ) is higher. Asia markets closed lower. In Europe this morning, 10 of 13 markets are trading lower.
Happy Trading,
Vinny
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