By Bryan McCormick
As the S&P 500 hits fresh lows, probing down through the 1220 area at time of this writing, sector breadth is also deteriorating.
The graphic below shows those sectors, with the box sizes deteremined by the weight of each sector in the index. The coloration is based on the year-to-date returns.
It's no surprise is to see the financial sector in bright red, as it is down more than 12 percent so far this year. The materials sector is the next weakest, down more than 8 percent, but we can see that it has a relatively small weight in the index.
The industrial sector was virtually flat to positive during yesterday's melt-up, but today it is down nearly 7 percent. Given its size, that is a major drag on the S&P 500.
The newcomers that are now negative on the year are technology and consumer discretionary, both down about 1 percent. When we add those two sectors together by box size, it's clear why today's trading is much heavier than yesterday, when these sectors bounced back into the green. Keep an eye on these two areas.
One other sector that is dragging down the S&P 500 may be less apparent at first glance because it is still green. Until yesterday, energy was the leading sector by a mile up.
The sharp drop today has reduced it from up 10 percent on the year to just 3 percent or less today. If we see energy tip into the red, that could well be the straw that breaks the S&P's back below the 1200 level.
(Charts courtesy of DeepFoo Analytics)