Last week at this time, the S&P 500 and nearly all of its ten major sectors were trading in extreme overbought territory. As you can see in our sector trading range screen at right, nine of ten sectors remain overbought as we close out this holiday-shortened trading week, but they all moved lower within their ranges. The action this week was a classic mean-reversion trade, where overheated areas of the market pulled in, while areas that had been underperforming bounced back a bit. As shown at right, Health Care was the one sector that wasn’t overbought last week at this time, and it’s the one sector that actually did well this week.
Below is an updated look at our asset class performance matrix using key ETFs trading on U.S. exchanges. While equities were down slightly this week in the U.S., we saw more significant pullbacks in countries like Brazil, Australia, Canada, China, France, Spain and the UK. Oil, gold, silver and the rest of the commodities patch also saw declines, with oil down 4%+. Month-to-date, oil remains up 11.8%.
If you’re a current Bespoke Premium or Bespoke Institutional subscriber, head on over to our Sector Snapshot report for additional market analysis. If you’re not yet a subscriber, you can start a free trial here.