As stocks bounced back intraday yesterday, the major index ETFs held firm in neutral territory, but still remain below their 50-day moving averages. Only the Russell 2000 (IWM) and Micro-Cap ETF (IWC) remain oversold, with IWC over 2 standard deviations below the 50-DMA. IWC has by far been the weakest ETF of this group over the last week with a decline of more than 5%. IWM has been the next worst performer falling 4.62%. Although everything is down, large-cap indices like the Dow (DIA) have seen lesser—but still over 3%—declines.
Of the individual sectors, given the macroeconomic tensions in the past week, there has been continued rotation into defensives. Both the Utilities Sector ETF (XLU) and Real Estate Sector ETF (XLRE) have actually risen over 1% in the past five days. XLRE’s gains have even brought it into overbought territory. While Consumer Staples (XLY) did not rise like these two, it is also one of the only ETFs that is still above its 50-DMA. Meanwhile, Energy (XLE) has been the worst performer falling over 7% over the last week. Now over 6% below its 50-DMA, it has reached extreme oversold territory thanks to weakness in oil. XLE is also the only sector ETF to show a downtrend in our Trend Analyzer. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer and much more.