Sector Relative Strength

by: Bespoke Investment Group

The charts below show the relative strength of the ten S&P 500 sectors versus the overall index. Given the interest in the Transports by Dow theorists, we have also included the relative strength of that group. In each chart, a rising line indicates that the sector is outperforming the S&P 500 while a declining line indicates underperformance. We have also included dots showing each time the Fed has recently cut rates (red) or left rates unchanged (black dots).

  • As shown in the charts below, only four (Consumer Discretionary, Energy, Materials, and Technology) of the eleven sectors shown have outperformed the S&P 500 over the last year.
  • While Financials have been one of the leading sectors off the March lows, they are still underperforming the S&P 500 by a wide margin since 10/08.
  • Not surprisingly, given all the debate in Washington over Health Care, that sector is near its lowest levels in the last year in terms of relative performance.
  • Finally, with the consumer supposedly tapped out, it's ironic that the Consumer Discretionary sector is near its best levels of the last year.

Relative strength 102009

Relative strength 102009a

Relative strength 102009b