Edition 0018. 06.04.2022. Week of 05.30 - 06.05.2022.
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.
Key Takeaways
Cyclical sectors remain mixed with XLY, XLF, XLRE in downtrends. XLB remains rangebound.
Defensive sectors are strong with XLP and XLU in uptrends while XLV remains rangebound.
Sensitive sectors are mixed with XLC, XLI, and XLK in intermediate term downtrends and XLE in an uptrend.
In the large-cap space, there is more market cap, 68.25%, in a downtrend than an uptrend, 8%.
Across the cap-scale there are more ranked highs than lows.
Year-to-date, the equally weighted averages are the best of the worst while large-caps are the worst of the worst.
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.
Last week 2 of the 11 sectors, XLE and XLI, closed with a gain.
6 sectors - XLE, XLI, XLY, , XLB, XLC, and XLK - outperformed SPY.
The top performer was XLE which printed a 52-week closing high. The laggard was XLV.
There were more ranked highs than lows.
The average distance below the last 52-week closing high is 14%.
From a quantitative perspective, the uptrends in XLE and XLU are being confirmed by accelerating momentum to the upside. XLB is not.
Our proprietary relative strength rank has the top three sectors as XLE, XLU, and XLP.
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, XLE continues well ahead of the pack with a 61+% gain. XLU is back in positive territory with a 3.87% gain. The other sectors are negative. XLY remains the YTD laggard.
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.
Financials (XLF). Click to enlarge.
Materials (XLB). Click to enlarge.
Real estate (XLRE). Click to enlarge.
Defensive sectors: sectors that provide goods & services that people require
in both economic expansions and contractions.
Consumer Staples (XLP). Click to enlarge.
Healthcare (XLV). Click to enlarge.
Utilities (XLU). Click to enlarge.
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.
Energy (XLE). Click to enlarge.
Industrials (XLI). Click to enlarge.
Technology (XLK). Click to enlarge.
Large-Cap Sector Summary Table
Click to enlarge.
Source for current weights: https://www.sectorspdr.com/sectorspdr/
There is more market cap, 68.25%, in a downtrend than an uptrend, 8%.
There is 23.5% in neutral trends which is XLB, XLP, and XLV.
My subjective analysis is different than the quantitative analysis on XLB and XLV. I see them as range bound while the model has quantified by the slope of the moving average and the closing price in relation to that moving average. My subjective analysis takes a slightly longer-term view of price action.
Weighted Sectors Across The Cap Scale
& Equally Weighted Large Caps
This table is sorted by Year-to-Date performance.
Click here for the performance table guide. Click the performance table to enlarge.
While the entire cap-scale was, on average, down last week, the small-caps were the best of the worst, while equally weighted large-caps led the losses. There were gains in energy and industrials across the cap scale, though in small-caps industrials did not participate. YTD the equally weighted large-caps are the best of the worst while the large-caps are the worst of the worst. Across the cap-scale, price printed more ranked closing highs than lows.
In the mid-cap space, we saw gains from energy and industrials. Energy printed a 52-week closing high while industrials printed a 5-week closing high. YTD we see massive gains from energy with a small gain from utilities and materials.
In the equally weighted large-cap space, we saw gains from energy which printed a 52-week closing high. YTD we see massive gains from energy and no other sectors. YTD we see massive gains from energy with a small gain from utilities and materials.
In the large-cap space, we saw gains from energy and industrials. Energy printed a 52-week closing highs while industrials printed a 5-week closing high. YTD we see massive gains from energy and no other sectors.
In the small-cap space, we saw gains from energy and industrials. Energy printed a 52-week closing high while industrials printed a 5-week closing high. staples and utilities. YTD we see massive gains from energy with a small gain from materials.
RSP / SPY. Click to enlarge.
This chart shows the ratio of the ETFs RSP (the equally weighted S&P 500) divided by SPY (the cap weighted S&P 500). When the ratio is headed higher RSP is outperforming SPY, and the opposite is true when the ratio is headed lower. The ratio is attempting to break above the yellow dashed line, marking the secular trend of SPY outperforming RSP since 2015. I am looking for confirmation with a break above the grey horizontal line marked by the orange question mark in addition to holding above the yellow dashed secular trend line.
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