Below is a chart showing the percentage of stocks in each S&P 500 sector trading above their 50-day moving averages. At the moment, just 18% of stocks in the S&P are above their 50-days — a very weak reading that speaks to the carnage we’ve seen in stocks so far in 2016. It’s the cyclical sectors that have the weakest readings, with the exception of Consumer Discretionary. Just 5% of Industrials stocks are above their 50-days, while both Health Care and Materials have readings of 7%. Technology and Financials — the two largest sectors in the market — both have very suppressed breadth readings as well at 11% and 10%, respectively.
Not all sectors are flashing weakness, however. Unfortunately, the sectors showing strength are all defensive in nature, which is not what market bulls want to see. As shown, Telecom and Consumer Staples both have readings more than double that of the overall market, while a whopping 90% of Utilities stocks are now above their 50-days.