Often times investors and investment professionals use so-called “Defensive Sectors” to help reduce downside risk to an overall portfolio. This idea helped for a good while back in 2008… yet once these Defensive ETF’s started breaking support, that was when the broad market picked up downside momentum.
Any reason to pay attention to these “Defensive” sectors right now? Yes!
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Attached is a 3-pack, reflecting three so-called “Defensive etf’s…Consumer staples, Healthcare and Utilities. As of the past couple of days, the Utilities ETF/XLU has broken key support, with Staples and Health care pushing support to an extreme!
If investors/professionals are using these ETF’s, a big caution sign will go up if support is taken out, not only toward these three….the broad market as well!!!
Remember, once the defensive plays started to breakdown in 2008, big time weakness took place across the board.