Coming off of declines last week, equities have performed much better in the first half of this week.  Currently, half of the major index ETFs have erased last week’s losses and moved back into overbought territory.  Meanwhile, the other half which is predominantly small and mid-caps, in addition to the Dow thanks to Boeing, are still in the red.  This half remains in neutral territory whereas most had been overbought this time last week.  Despite some of these ETFs having managed to recoup losses from the past week, small and mid-caps still have a little ways to go until they do the same.  Each of these are still down over 1% with the Core S&P Small Cap (IJR) down the most at 1.69%.  Even with this recent pullback, small and mid-caps remain some of the best performing indices so far in 2019.

Taking a look by sector, it is just about the same story.  Of the eleven sectors, six are now overbought while the remaining five are neutral.  In the same way that those with a loss over the past week are still neutral, the others that have edged out gains have pushed deeper into overbought territory.  As we mentioned in last night’s Closer, the Utilities sector is of particular interest.  The sector’s Water, Multi, and Electric industries are the closest to their respective 52-week highs.  Utilities is currently the most overbought approaching extreme levels (2 standard deviations or more above the 50-DMA).  Over the past week it has gained the most at 2.1%, while on a YTD basis, the sector’s gains have been more middling.  Conversely,  the weakness in the Health Care sector ETF should be addressed as it is up only 5.28%; far worse than its peers.

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