Tacking onto the past week’s losses, yesterday was the first decline of over 2% in more than five months for the S&P 500 (SPY). Currently, every major index ETF has now declined over 4% in the past five days. Small caps and mid caps, in particular, have gotten hit hard as each one has fallen over 5%. Meanwhile, the Nasdaq (QQQ) has more dramatically underperformed, currently sitting just under 6% below where it was last week at this time. QQQ has still outperformed all other major index ETFs on a year to date basis, though. There is also no longer any major index ETF sitting above the 50-DMA. Whereas last week the group was entirely overbought, they head into trading today at either oversold levels or neutral and on the cusp of oversold. As seen through the long tails across each name in our Trend Analyzer, the movement towards this lower end of the ETFs’ trading ranges has been rapid. But this pullback provides a good timing opportunity considering each one is still in an uptrend over the past six months. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer and much more.
Like the broader market, declines can be seen across the eleven sectors as only Utilities (XLU) has managed to edge out a gain over the past week. XLU is now up just over 1% and is also the only sector ETF to sit in overbought territory. Other defensives like Real Estate (XLRE) and Consumer Staples (XLP), while not positive, have held up better than their peers. These two have only seen declines of less than 1% versus losses upwards of 6.29% from Technology (XLK). Despite XLK’s steep declines in the past week, it actually has yet to push into oversold territory. Along with six other sectors, XLK is in neutral territory, but similar to most other sectors, XLK has fallen below its 50-DMA. Only XLRE, XLP, and XLU have managed to hold above their respective 50-DMAs. Some have fallen far enough below the 50-DMA to now sit in oversold territory, with Energy (XLE) doing so to an extreme degree. This is in part due to volatile oil prices over the past few days. The silver lining once again is that each of these (except for the overbought XLU) have good timing scores and XLE actually has a perfect timing rating.