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“Never trust a computer you can’t throw out a window.” – Steve Wozniak

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

US equity futures are relatively quiet ahead of this morning’s open, trading up 15-20 basis points.  For market-watchers and investors, having a nice, quiet, dog-days-of-summer morning every now and then is much appreciated!

As we noted in a post yesterday, the Materials sector has broken out (to the upside) of the flag pattern of lower highs and higher lows that had formed over the last six months.  Check out the breakout in the first chart below.

In addition to Materials breaking higher, the Utilities sector is going in the opposite direction.  As shown in the second chart below, Utilities has traded straight down since the end of July as the rest of the market has been rallying.

While six of eleven S&P 500 sectors are now overbought, Utilities is the only sector that’s currently oversold.

Breadth for the Utilities sector has been very weak.  Below are charts pulled from our daily Sector Snapshot (view yesterday’s here) showing the percentage of Utilities stocks above their 50-day and 200-day moving averages.

Fewer than 10% of Utilities stocks are now above their 50-DMAs, while just 29% are above their 200-DMAs.  For the 200-DMA reading, it’s easily the worst of the last year.

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