The SPDRs Are Crawling: A Sector Snapshot

Last Week's Market Watch (Five Day Trading Range)

• XLF Financials weekly trading range 24.33 to 25.18 Friday close 24.76
• XLK Technologies 24.32 to 25.42 close 25.35 BOUGHT 1/25s call
• XLP Consumer Staples 28.05 to 28.51 close at 28.49
• XLV Health Care 31.47 to 32.18 close at 32.12
• XLB Materials 43.11 to 44.79 close 44.45
• XLY Consumer Discretionary 31.78 to 32.60 close 32.49 MISSED 1/32s @ 2.15 Put
• XLI Industrial 38.06 to 38.99 close 38.84
• XLU Utilities 40.81 to 41.61 close 41.38
  
• XLE Energy 88.52 to 85.02 close 86.00

This Week:

Movement is the key for these SPDRs. Energy stumbled a bit last week, due in part to a price manipulation inquiry. As mentioned in previous articles, the stock markets in general are to a degree all about manipulation. Energy prices however allow a perfect time for a bit of DC-style grandstanding.

Look for energies to make a 3-5% move up or down this week.

1. A number of the CNBC crew called the top of oil which invariably means that oil still has additional upside potential. The consumer may be taking on water, but evidently is not dead. However. depending on spending habits...for 10-15 % of the population the stimulus checks won't be enough.
2. That is part of the reason XLY should see some additional movement by January.
3. Last, the weakened state of the U.S. dollar (Currency traders can say whatever they want about the dollar's strength) is just taking a temporary breather.

Financial Select Sector SPDR (XLF) (didn't someone say it was time to buy a couple of weeks ago?) was not helped out by Key Bank's warning that losses could "double" ... this also did not bode well for Regional Bank HOLDRS (RKH), which has a beautiful downward movement on its 200 day average.

Look at metal prices this week. It appears that a selloff may be a bit overdone at this point...(London Metal Charts are just ugly)..... Vanguard Precious Metals and Mining Fund (VGPMX) continues to hold its own! Are Olympic Steel (ZEUS) , AK Steel (AKS), and Cleveland-Cliffs (CLF) still a deal? I would have to think so!!! Private equity investors are increasing a stake in CLF as I write.

First Solar (FSLR) could well be an ideal candidate for a strangle. The volatility is there. Five day high of 278. Low of 252. Currently 267.

Comments

[GMiki1:]

In re Ben Bernanke on the dollar today. He looked as if he'd been crying--or is heavily medicated (I'm completely serious). The markets are astonishing in re taking words to represent reality. The Fed is supporting the dollar? By doing what? Oh, more talking up the dollar.

In re oil--since we're past peak and need more than is being produced, it's not likely to go down and stay down. U.S. consumption is no longer key. In fact, our consumption IS down, along with auto sales, bigtime--Ford and GM just came out with their figures.

2008 Jun 03 12:11 PM

[Jake2:]

Even as you write, CLF down 3.68% on Tuesday, XME down 2.72%, AKS down 4.24%, XLE down 1.38%. Also, both XLF and XLB down.
Glad I didn't take your advice.

2008 Jun 04 04:44 PM

[chrisinfl:]

jake2, you should have a little more faith than that, I bought clf
after their stock split at just over $93 a share, take a guess at
where the stock is at now. Even after the markets $400 drop this
last Friday, CLF has never dropped below $100!
Get back to the basics my friend!
check out Haliburton's picks as well!

2008 Jun 08 11:41 PM