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June 2023 Sector Rotation Update
Sector pullbacks, next moves, charts, watchlist
Gamma Ray
June 04, 2023
Recent pullbacks from quarterly highs: GDX, GDXJ, XAU (Gold and Silver Sectors)
Recent pushes higher: SMH, XLK, XLC, ITB, SKYY, GDX, GDXJ
Slowly increasing: HGX (Housing Sector), XLI, XLRE
Pushed lower: OIH, XME, XRT
Where are the next moves?
XLB
Summary
To start off the month of June XLB had a gap up and go. Very bullish start for the month. This pushed right into the monthly golden zone and is very close to the quarterly golden zone.
This is my favorite mean reversion trade with lots of juice in the sector. This had 6 down weeks and closed out last week very strong. Should this trigger a weekly 2 up reversal I could see it going to take out the last 5 weeks price to about 84.
Urgent Level
Needs to hold weekly golden zone at 76.73 - 76.25 for the reversal trend to stay in play.
Full Timeframe Continuity (FTFC)
The 6 month has triggered up while the 3 month has triggered down and is doing a retrace
The play here is a mean reversion to catch the retrace and be along for the ride should price push past the 50% of the quarter.
The risk to reward if prices continues through the end of the month seems worth it.
Key Levels
6/4/23 Weekly Golden Zone: 76.73 - 76.25
Price is at May Golden Zone: 78.62 - 77.88
Price is Below Quarterly Golden Zone: 80.34 - 79.02
Price is Above 6 Month Golden Zone: 75.60 - 73.54
XLRE
Summary
XLRE is now sitting at the top of the previous month’s golden zone area. With 26 days left in the quarter price has yet to retest the Quarterly golden zone at 38.28. That is my median area should there be a weekly reversal and continuation up for the rest of the quarter.
One way to play this would be to play a swing up to 38.28. Should there be a rejection off of this zone then you’ll look to continue the Full Time Frame Continuity trend down to take out the July 6M and Jan 2020 6M close targets.
Urgent Level
This week price will need to stay above the weekly golden zone area at 36.28 - 36.12 if one is looking to play the up trend to 38.28.
Full Timeframe Continuity (FTFC)
Down: Price is below the Yearly, Quarterly golden zone areas.
Beware that a weekly reversal could be in play this week and a close above 36.28 can start a 1-2-2 rev on the monthly.
Key Levels
6/4/23 Weekly Golden Zone needs to hold if 2-2 rev is in play: 36.28 - 36.12
Price is Above May Golden Zone: 36.76 - 36.44
Price is Below Quarterly Golden Zone: 39.20 - 38.28
ARKQ (Autonomous Tech & Robotics)
Summary
This secretly gapped up at the beginning of June and is looking to trigger the 3 month 2-2 rev up. The 6 month golden zone has a ways to go but this could be a really fun squeeze to play.
The quarterly golden zone from Jan 2023 held and the dip was bought the entire time.
For a weekly play you can play this bullish if it holds the weekly golden zone at 50.33 to 49.95. If the vix continues to get crushed you can be confident this will continue to rise and look for 59.24.
Urgent Levels
Weekly golden zone hold at 50.33 to 49.95
Quarterly golden zone hold at 46.29 to 44.83
AMT (in XLRE) has lots of juice to run up
Tapped the golden zone here. If we close the week on or above this zone we going up up.
You can see volume divergence here where momentum is increasing while price gets pushed down and the big boys are buying the dip.
Big volume spike (over 4M) on 5/31.
June is the last month of the quarter and it is possible we are seeing sector rotation here before the next quarter kicks off.
FCX (in XLB)
Mean reversion to 41 area to retest the outer channel it broke out from.
Selling pressure exhausted (Noya red band thinning)
If XLB continues to get money flow this could easily continue floating higher with it
Sectors I’m keeping my eye on
XAU
Quarterly now below opening price & Monthly triggered a reversal
131.63 critical retest area for bears if you want to play this short
119.95 Monthly continuation lower
Bearish target 112
6M Reversal target is at 110
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