The S&P 500 re-took its 50-day moving average yesterday, but unfortunately it did so without more than half of its index members closing above their 50-days as well. As shown below, only 48% of stocks in the S&P are currently above their 50-day moving averages. Bulls would like to see a much stronger reading than that based on where the S&P is currently trading.
Below is a look at the percentage of stocks above their 50-day moving averages by sector. As shown, five cyclical sectors have breadth readings that are weaker than the 48% reading for the broad S&P 500. Energy is all the way down at 16%, while Industrials and Consumer Discretionary are at 40% or less. The two sectors with the strongest breadth levels are both defensive in nature — Utilities and Consumer Staples. We’d prefer to see the script flipped with cyclicals leading and defensives lagging.