Thank you for your support. I appreciate your interest in the Sector Selector.
We currently have 65% exposure to stock ETFs with 35% of our portfolio in cash.
We’re entering the traditionally bullish 4th quarter of the year and stocks are trying to form a bottom as measured by the New York Stock Exchange Advance Decline line (NYAD), whose current trading pattern resembles those of the last two periods where major bottoms formed – December 2025 and March 2026.
The difference between the present and those two major buying opportunities is that interest rates are higher and financial conditions are tighter. That makes the situation a bit trickier than usual.
In other words, the charts suggest that a bottom is forming, but the monetary background (higher interest rates and tightening financial conditions) isn’t optimal to drive stock prices higher.
That means that we must remain disciplined and focus on areas of the market that are exhibiting relative strength.
Still, there are areas of the market which are attracting money. One of them is the value sector, which I highlight below in an update of one of our current holdings.
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Value Stock ETF (SPYV) Shows Relative Strength
As I describe below, our major holdings are in the technology and biotech sectors. But one overlooked sector of late, that described as value is showing signs of being accumulated. That means that it’s time to move the SPDR S&P 500 Value ETF (SPY) back to the forefront. SPYV’s five top holdings are Apple (AAPL), Amazon (AMZN), Exxon Mobil (XOM), Intel (INTC) and Walmart (WMT). Thus, it offers entry into the blue chip sector at a much lower price than owning each of these and other holdings individually.
SPYV has quietly come back to its 50-day moving average and is under accumulation as both the ADI and OBV lines are rising.