The S&P 500 is up almost 1.6% Tuesday and is heading for its fourth straight day of gains following a rocky end to September and a volatile start to October.
Even with this “rally,” a word that should be loosely in this instance, many marquee sector exchange traded funds remain technically imperiled, at least from a moving averages perspective.
Josh Brown of Reformed Broker fame notes that coming into Tuesday, just two of the nine sector SPDR ETFs resided above their 50-day moving averages.
Not surprisingly, as Brown points out, the resilient, ultra-conservative Utilities Select Sector SPDR (NYSEArca: XLU) and the Consumer Staples Select Sector SPDR (NYSEArca: XLP) are the sector SPDRs that are furthest removed, in a good way, from their 50-day moving averages. On their respective daily charts, XLU and XLP entered Tuesday almost 3.4% and nearly 1.1% above their 50-day moving averages. [Staples ETFs are Loving This Market]
Over the past month, XLP has barely moved while XLU is higher by 3.6%. However, not all conservative ETFs have been able to muster the strength to reclaim important moving averages. Although the iShares U.S. Telecommunications ETF (NYSEArca: IYZ) and the Vanguard Telecommunication Services ETF (NYSEArca: VOX) have bounced in recent days, both ETFs reside below their 50-day lines. [Telecom ETFs Betray Conservative Reputations]
Transportation stocks have bounced the hardest, according to Brown, with the iShares Transportation Average ETF (NYSEArca: IYT) surging 12.1% since Oct. 10, including Tuesday’s 2.7% gain. That run has IYT, the largest transportation ETF, residing above its 50-day moving average as well.