Despite a gap up and some large movements intraday, most indices finished yesterday right around the prior day’s close leaving the picture in our Trend Analyzer largely unchanged. Every major index ETF remains extremely oversold. In addition, all of these names firmly remain in downtrends. The Nasdaq (QQQ) also has still held onto gains for the year. QQQ is also the least oversold relative to the other index ETFs. Despite this, the degree of the movement into/deeper into oversold territory over the past week is about in line with its peers.
Taking a look at sector ETFs, while YTD returns of cyclicals have gotten hammered, over the past week more defensive sectors haven’t been immune either. These groups have quickly retreated off of neutral and overbought levels as illustrated by the long tails in the Trading Range section of our Trend Analyzer. Headlines of the ACA’s constitutionality coming to question late last week has sent the Health Care Sector (XLV) tumbling. It is currently the second most oversold sector behind Financials (XLF). It is also down the second most in the past week behind the battered Energy Sector (XLE). Energy, much like oil, has fallen off a cliff recently, now down almost 16% on the year and 5.66% in the past five days. While Energy is down a lot in YTD terms, Materials (XLB), Communication Services (XLC), and Financials are not far behind.