Here are a series of 3 charts that I use to give me a quick snapshot of momentum trends across the SPDR sectors and a few other key areas like bonds, the Dollar and PM's.
Chart 1 Bonds, US Dollar, PM's and Gold Miners
Momentum for Bonds remains strong while the momentum behind the $USD is fading.
Momentum for the precious metals and gold miners remains in a persistent downtrend although with a push the gold miners could make a move above the zero line and DT resistance. If you look at the price charts of several individual gold miner names, they are behaving much better than the underlying metal.
Chart 2: XLE, XLB, XLI, XLF, XLU
Energy has pulled back to the zero line and is flattening; an upturn here would be very bullish. Industrials and Financials remain pretty weak. After a huge push up, momentum behind the utilities looks to be flattening.
Chart 3: XLK, XLV, XLP, XLY, XRT
Tech and Healthcare look strong from a momentum perspective. Indicators for both showing bull crosses either at the zero line or above.....bullish. Staples have flattened out. Retail is losing momentum. Consumer Discretionary has backed off, but is still positive and may be in the early stages of a bull cross move.
We've all heard about or witnessed first hand the 30 year bull market in Bonds. It's actually been closer to a 35 year run but no need to quibble with CNBC. Shown below is a weekly look at the $USB / 30 year Bond prices from 1982 to date. You can see price has been in a well-defined up-channel since 1988. In Mid 2016, price tagged the outer limits of the up-channel and has pulled back sharply since then.
The chart gives a nice example of how negative divergence of both the RSI and Momentum ( MACD / PPO ) played out. Note how both the RSI and Momentum peaks were at lower levels even as priced moved significantly higher than the prior peak in 2015. It proved to be an early heads up that a pull back in price was a distinct possibility. Negative divergence is also often seen when price is forming a double top.
As you can see from the chart, 140 is the lower bound of the up channel that has been in place for 30 years. I expect $USB to re-test the lower channel bound near the 140 level which will be a major test. The multi decade bull move in bond prices cant be questioned until that lower trend line is violated to the downside. If / When $USB reaches 140, it would be a beautiful place to get long. If price falls out of the channel, the trade is wrong; close it. If indeed price falls out of the channel its time to fade bonds against 140. Because that up-channel has been in place for so long, dropping out of that channel could mark the beginning of a bear market in bonds; something that hasn't been seen since the 1970's.
I love trades where there is a clear line in the sand to shoot against. In this case, the lower channel line is a beautiful line of demarcation that has been in place for decades. How price behaves in and around 140 will be significant either way.