Watch Out! These 8 ETFs Have Negative Weekly Chart Profiles

NEW YORK (TheStreet) - Friday's close resulted in negative weekly charts for the Dow Industrials, S&P 500, Dow Transports and Russell 2000, but not for the Nasdaq, which ended the week above its five-week modified moving average at 4110.

Among the 11 sector exchange-traded funds I track, eight ended last week with negative weekly charts. The exceptions are Utilities Select Sector SPDR (XLU), which has a positive weekly chart, and the Technology Select Sector SPDR (XLK) and the Health Care Select Sector SPDR (XLV), which have neutral weekly chart because they closed above their five-week modified moving averages at $34.99 and $55.72, respectively.

The tech sector ETF has a similar weekly chart as the Nasdaq explaining the neutral pattern that includes declining 12x3x3 weekly slow stochastics and weekly close above its five-week MMA. The health care ETF has the same pattern.

The utilities sector ETF has a positive weekly chart which consists of a weekly close above its five-week MMA at $38.36 with its 12x3x3 weekly slow stochastic rising above 20.00 on a scale of 00.00 to 100.00.

Below I provide my buy-and-trade profiles for the eight ETFs that ended last week with negative weekly charts. These patterns may shift to neutral at the end of this week if Federal Reserve Chair Janet Yellen offers dovish comments in her testimony before Congress, which starts Tuesday in the House. The market wants the new Fed chairman to indicate that the tapering of quantitative easing may not continue at its current pace if economic data weaken.

Materials Select Sector SPDR (XLB) ($44.92) traded to an all-time intraday high at $46.56 on Jan. 21 then fell to $42.78 on Feb. 5 staying above its 200-day simple moving average at $42.33. The weekly chart is negative with its five-week MMA at $44.73 with the 200-week SMA at $37.24. My semiannual value level is $43.29 with a monthly pivot at $44.97 and quarterly risky level at $46.18. My annual value levels are $39.61 and $37.62. A positive reaction to Yellen comments would have this ETF above $44.73.

Industrial Select Sector SPDR (XLI) ($50.15) traded to an all-time intraday high at $52.32 on Jan. 15 then fell to $48.38 on Feb. 4 staying above its 200-day SMA at $46.75. The weekly chart is negative with its five-week MMA at $50.59 with the 200-week SMA at $37.61. My annual value level is $43.34 with a semiannual pivot at $50.88 and quarterly and monthly risky levels at $51.33 and $51.95. A positive reaction to Yellen comments would have this ETF above $50.88.

Consumer Discretionary Select Sector SPDR (XLY) ($64.05) traded to an all-time intraday high at $66.85 on Dec. 31 then fell to $61.03 on Feb. 3 staying above its 200-day SMA at $60.74. The weekly chart is negative with its five-week MMA at $64.42 with the 200-week SMA at $45.01. My annual value level is $65.13 with a semiannual pivot at $65.13 and monthly and quarterly risky levels at $67.36 and $69.16. A positive reaction to Yellen comments would have this ETF above $65.13.

Consumer Staples Select Sector SPDR (XLP)($41.09) traded to an all-time intraday high at $43.46 on Nov. 18 then fell to $39.83 on Feb. 3 below its 200-day SMA at $41.33. The weekly chart is negative with its five-week MMA at $41.72 with the 200-week SMA at $33.99. My annual value level is $36.53 with an annual pivot at $40.69 and monthly, semiannual and quarterly risky levels at $42.23, $32.27 and $44.13. This ETF was one of the first to weaken as consumers reduced spending. Monetary policy has not helped Main Street and moving below $40.69 again would be a consumer concern that Fed policy under Yellen continues to fail on Main Street.

iShares US Consumer Services (IYC) ($117.71) traded to an all-time intraday high at $121.97 on Dec. 30 then fell to $112.61 on Feb. 3 above its 200-day SMA at $110.71. The weekly chart is negative with its five-week MMA at $118.06 with the 200-week SMA at $82.15. My annual value level is $95.00 with a semiannual pivot at $117.62 and monthly and quarterly risky levels at $122.86 and $126.02. If this ETF fell below $117.62 again it would be another warning about consumer spending and the failure of the zero percent funds rate policy that's been in effect since mid-December 2008.

Energy Select Sector SPDR (XLE) ($83.63) traded to an all-time intraday high at $88.53 on Dec. 31 then fell to $81.78 on Feb. 3 then recovered to be above its 200-day SMA at $83.50. The weekly chart is negative with its five-week MMA at $85.28 with the 200-week SMA at $71.78. I do not have a value level for this ETF and show quarterly, monthly, semiannual and annual risky levels at $86.54, $86.95, $88.66 and $89.37. This ETF reflects the weak demand for energy and oil-based products, which is another sign that monetary policy has not helped the economy as much as the Federal Reserve projects.

Financial Select Sector SPDR (XLF)($21.31) traded to an all-time intraday high at $22.16 on Jan. 15 then fell to $20.50 on Feb. 3 staying above its 200-day SMA at $20.47. The weekly chart is negative with its five-week MMA at $21.40 with the 200-week SMA at $16.29. My semiannual value levels are $20.24 and $19,44 with a monthly pivot at $22.00 and quarterly risky level at $23.38.

iShares Transportation Average (IYT) ($128.40) traded to an all-time intraday high at $135.93 on Jan. 23 then fell to $125.50 on Feb. 5 staying above its 200-day SMA at $120.23. The weekly chart is negative with its five-week MMA at $130.11 with the 200-week SMA at $120.23. My annual value level is $111.27 with quarterly and semiannual pivots at $126.32 and $129.17 and monthly risky level at $138.30.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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