In yesterday’s Sector Snapshot, we highlighted how the internals of several sectors have weakened dramatically in recent days. One such measure in which there are drastic differences versus a couple of weeks ago is the reading on the percentage of stocks above their 50-DMAs. In the charts below, we show the changes in this reading across sectors and for the broader S&P 500.
As shown, the two sectors which have seen the largest share of their stocks fall below the support of their 50-DMAs are Financials and Materials. Two weeks ago, both of these sectors boasted some of the strongest readings of all sectors, but through yesterday, those readings have fallen over 60 percentage points. Meanwhile, Energy and Real Estate have seen almost all of their stocks trade above their 50-DMAs over the past two weeks without much change. While the declines were not as dramatic as Materials and Financials, Industrials and Consumer Staples have also seen a significant share of their members fall below their 50-DMAs. While most sectors have seen a decline in this reading, Tech and Health Care have been notable standouts with both sectors having more stocks above their 50-DMAs now than two weeks ago. This is indicative of the rotation that has been going on underneath the surface throughout the entire bull market that began when the S&P made its 2020 low after the COVID Crash last March. Click here to view Bespoke’s premium membership options.