One Sector Bucking the Bearish Market Trend

Tom Gentile

Posted in Technical Analysis

By: Tom Gentile on October 7th, 2022 • 3 mins read

The Non-Farm Payroll number for the month of September was reported today. Nonfarm payrolls increased 263,000 for the month. This came in lower than estimates, which were for 275,000.

The unemployment rate came in down 0.2 percentage point at 3.5%.

The markets did not take this well and sold off and though we haven’t closed the day of trade just yet, the Dow was down 711-points at the time of this writing and not looking like there is much going to change in the last hour.

Despite the market sell off there is one sector that is holding up recently and I will show you all in a bit the comparison chart year-to-date between this sector ETF and the SPY to illustrate it is holding up and bullish on the year so far despite the SPY being bearish year-to-date.

The XLE

The website I mentioned yesterday and in prior educational pieces www.sectorspdr.com has a sector tracker feature, which let’s us check in and see the percentage gains and losses of the 11 sector SPDR ETF’s.

We showed the XLE, was the only SPDR ETF showing a gain for yesterday. Here is a look at the 11 today.

Figure 1: www.sectorspdr.com Sector Tracker for 2022/10/17
Figure 1: www.sectorspdr.com Sector Tracker for 2022/10/17

It is lower on the day, but minimally down. And it is the sector ETF that is down the least. Look at the same tracker for yesterday and you will see it is as I wrote the only one that trader higher yesterday.

If you are looking to put your money to work in a bullish sector, because trading things short or trading bearish option trades makes you nervous or you aren’t that familiar with how to do that, the XLE may be where you and you broker decide to focus your investments and / or bullish option trades.

You can look up on that site or other on the internet for the holdings / components and their ticker symbols to then start charting those.

You can subscribe to my tools www.tomsoptiontools.com to run a myriad of scans to find opportunities as well.

Here are the two charts comparison of the XLE vs the SOY year-to-date.

Image 15
Figure 2: Year-to-Date Candle Chart on XLE

You can see that the XLE is not trading at its highs like it was in June, but if you look at where it started the year to where it is now prices on XLE are higher.

Also, for momentum and or a directional indicator view note the lows are getting higher, (emphasized by the ascending horizontal arrow in the chart image above; Figure 2)

Here is the sane year-to-date chart for SPY

Figure 3: Year-to-Date Candle Chart on SPY
Figure 3: Year-to-Date Candle Chart on SPY

Not only is this trading lower on the year it is at risk at breaking to new lows.

Here is a sample of some of the components that make up the XLE:

Image 17

You can see in their charts they are trading in a bullish fashion, here are just a couple of examples:

Occidental Petroleum (NYSE: OXY)

Figure 4: Year-to-Date Candle Chart on OXY
Figure 4: Year-to-Date Candle Chart on OXY

ConocoPhillips (NYSE: COP)

Figure 5: Year-to-Date Candle Chart on COP
Figure 5: Year-to-Date Candle Chart on COP

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.