Consider Tracking SPLV
Yesterday had the shaping of something much worse and it was good to see the market close just above even. I would have liked to see the gains hold but at least they were able to reverse the market from morning lows. The buying came into the consumer defensive stocks (many had healthy gains) and now it’s a matter of moving the buying into the utility stocks. XLU will be your guide.
You may want to consider tracking SPLV. It’s the S&P 500 Low Volatility ETF, made up of the 100 lowest volatility stocks in the S&P 500. It’s also the made up of many of the largest and best run companies in the world, the ones the larger institutions love to own. SPLV was battered in July dropping more than 2x the S&P 500 index. The market will not rise until SPLV rises because that’s where the major institutional money flows. Right now the utility companies in SPLV continue to get hit and continue to hold the ETF back. If money comes back into utilities, it will be a good sign as it means that the larger institutions see value and are moving back in.
Short-term the market is slightly oversold today. VIX dropped yesterday and hopefully this is an indication that some of the fear is subsiding and there is a realization that there are quality companies available at good prices.
Today’s Potential Opportunities on Further Pullbacks:
ETFs: SPLV