Some early thoughts on the different SPDRs-
Basic Industries (XLB)
56% Chemical, 18% Paper. (Dupont is 20% of the 56% Chemical).
Consider buying on a reversal up in chemicals as long as
Paper is showing some strength and Dupont is not bearish.
Consumer Services (XLV)
43% Media, 11% Disney (Leisure) & 9% McDonalds (Restaurant)
Consider using as a Media proxy if Disney & McDonalds are acting OK.
Consumer Products (XLP)
45% Drugs, 38% Food.
Nice defensive portfolio along with good exposure to the big pharms.
(XLY)
43% Retail, 17% Auto, 17% Building. Walmart & Home Depot make
up 1/3 of this portfolio. Ford & GM add about 7% each. Good portfolio when consumer spending is high. Buy on tax cut, sell on tax hike!!!!
(XLE)
Essentially big oil. 50% is in Exxon, Royal Dutch & Mobil. Good way to play the oil sector (Long or Short as Sector SPDRs can be shorted).
(XLF)
53% banks, 23% Insurance & 21% Financial. Each is well diversified.
(XLI)
28% Machinery & Tools, 26% General Electric. The other 46% is well spread out among the cyclicals. Nice place to be coming out of a recession.
(XLK)
Big Tech. Microsoft, Intel, IBM, AT&T, Lucent, Cisco, Dell etc.
(XLU)
61% Telephone, 37% Electric Utility. Basically the baby bells and some big electrics. Electric utilities are going through deregulation and there will be winners and losers. This might be a core holding because of the growth in on-line activity. Might be a good idea to buy 100 shares every time a new zip code is added!
Later, Dick
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