Edition 0010. 03.19.2022. Week of 03.14 - 03.20.2022.
This is the weekly commentary that examines all 11 S&P sectors. We first analyze the large cap sectors in depth. We look at price, trend, relative strength, and momentum. Then we check in on the sectors in the mid-cap, small-cap, and equally-weighted large cap spaces.
S&P 500 Large-Cap Sectors.
Sector Performance Table. Sorted by 1-week rate-of-change.
Click here for the performance table guide. Click the performance table to enlarge.
The sectors were strong last week except for energy which notched its just 2nd loss in 11 weeks this year. It was a risk on performance with discretionary finishing in the top spot, followed by tech, and then the financial sector.
Sector performance sorted by the year-to-date rate-of-change.
Click here for the performance table guide. Click the performance table to enlarge.
Year-to-date sector and SPY performance. Click to enlarge.
Year-to-Date, the picture is largely the same. Energy is positive while the other sectors are negative. XLF did overtake XLU for second position as it attempts to turn positive on the year as it was during the end of January.
Sector Charts!
Cyclical sectors: sectors that tend to lead as the economy expands and lag as
the economy contracts.
Consumer Discretionary (XLY). Click to enlarge.
XLY finished in 1st position. It outperformed SPY and recorded a 4-week closing high. The 40-week simple moving average is undecided as it fluctuates between turning up and down. Momentum is decelerating below its 0-line. Relative strength, like price, remains in a down trend despite last week’s massive marubozu candle breaking above a downward sloping trendline.
Financials (XLF). Click to enlarge.
XLF finished in 3rd position. It outperformed SPY. XLF recaptured its still upward sloping 40-week simple moving average. Momentum has turned up right above its 0-line though remains below its downward sloping trendline. Relative strength remains above its oscillator 40-week simple moving average and is testing its downward sloping trendline from below. XLF remains rangebound.
Materials (XLB). Click to enlarge.
XLB finished the week in the 6th position just below SPY. Last week’s large candle has remounted its downward sloping 40-week simple moving average. Momentum has breached its 0-line, though has decelerated. Relative strength remains above its downward sloping 40-period simple moving average and below its upward sloping trending. Price remains rangebound.
Real estate (XLRE). Click to enlarge.
XLRE finished in 9th position and underperformed SPY. Price remounted its still upward sloping 40-week simple moving average. Momentum has turned up from its 0-line. Relative strength remains above its upward sloping 40-week simple moving average and upward sloping trendline. XLRE remains rangebound.
Defensive sectors: sectors that provide goods & services that people require
in both economic expansions and contractions.
Consumer Staples (XLP). Click to enlarge.
XLP finished in 8th place and underperformed SPY. Price had remounted its upward sloping 40-week simple moving average. Momentum is testing its upward sloping trendline from above. Relative strength has broken below its upward sloping trendline though remains above its upward sloping 40-week simple moving average. XLP is rangebound.
Healthcare (XLV). Click to enlarge.
XLV finished last week in 4th position and outperformed SPY. The strong candle remounted its upward sloping 40-week simple moving average. Momentum has turned up at its 0-line though remains below its average and its downward sloping trendline. Relative strength remains strong and at a 7-month high. Price remains rangebound.
Utilities (XLU). Click to enlarge.
XLU finished the week in 10nd place and underperformed SPY. Unlike the Dow Utility Average, price has not closed above its pre-covid price levels. Price remains rangebound until it closes above $72. Momentum is positive as the oscillator line is above its average line and upward sloping trendline. Relative strength is testing its upward sloping trendline from above and its remains above its upward sloping 40-week simple moving average.
Sensitive sectors: sectors that rise and fall with the general economy, but at
the same time have a sensitivity to additional factors.
Communication Services (XLC). Click to enlarge.
XLC finished in 5th position and outperformed SPY. The candle pattern is a tweezers engulfing showing us that the bulls were strong. They stepped in at the $53.50 level which is a prior resistance turned support. Momentum remains strongly negative though has decelerated last week. Relative strength continues to make multi-year lows. XLC is in a downtrend.
Energy (XLE). Click to enlarge.
XLE finished the week in 11th position underperforming SPY. Price remains above its upward sloping 40-week simple moving average, just 1 week from a new 52-week closing high. Price remains above the 61.8% Fibonacci retracement level from the 2014 highs to the 2020 Covid lows. Momentum and relative strength are strong. XLE is in an uptrend.
Industrials (XLI). Click to enlarge.
XLI closed last week in 10th position and underperformed SPY. XLI closed just below its downward sloping 40-week simple moving average. Moment is negative though decelerating. Relative strength has been strong since January and is above its downward sloping 40-week simple moving average. Price remains rangebound.
Technology (XLK). Click to enlarge.
XLK finished in 2nd position last week and outperformed SPY. Price remounted its still upward sloping 40-week simple moving average and notched a 4-week closing high. Momentum is negative. Relative strength remains below its upward sloping 40-week simple moving average. Price remains rangebound.
Sector Summary Table. Click to enlarge.
The amount of market cap with a positive trend increased significantly from 7% to 40.50% while the negative cap fell from 49.25% to 9.5%. The momentum condition did not change for any of the sectors, though through the natural shift in weightings of the sectors, positive momentum did decrease from 7% to 6.50%. I have not changed the trend of any sector in my subjective trend analysis, though due to natural changes in the sectors’ market cap, the percentage of cap in an uptrend has reduced from 4.25% to 3.75%, while the percentage of market cap in a rangebound trend has increased from 74.75% to 75%, and the down trending market cap has increased from 21% to 21.50%. The difference in the quantitative trend versus the subjective trend analysis is due to the large bounces last week in many sectors has caused price to close above an upward sloping 40-week simple moving average.
Source for current weights: https://www.sectorspdr.com/sectorspdr/
Weighted Sectors Across The Cap Scale
& Equally Weighted Large Caps
This table is sorted by Year-to-Date performance. Sorted by 1-week rate-of-change.
Click here for the performance table guide. Click the performance table to enlarge.
Last week we saw the small-caps outperforming. YTD, energy remains positive along with a very miniscule gain from materials.
Behind small-caps were the mid-caps. The picture is the same with outsized gains for energy and gains for materials.
Large-caps were next though the only positive sector YTD is energy.
Equally weighted large-caps gained the least last week, though YTD has the most sectors with positive returns. Energy, followed by very small gains from materials, utilities, and financials.
Commenti