Sector Relative Strength

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.