S&P 500 Industry Group Breadth Running Strong

The S&P 500 may be hitting record highs at a pace of more than once every other day, but would you believe that there are still Industry Groups trading below its 50-day moving average? The chart below shows the rolling percentage of Industry Groups trading above their 50-DMA over the last several years, and the current reading stands at 91.7%. Over the last five years, there have been numerous periods where a higher percentage, and even 100% of Industry Groups traded above their 50-DMA, and the most recent was back in July.

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So, which are the two outlier groups that are still below their 50-DMAs?Well, when everyone seems to be taking an offensive posture in the market, it’s only natural that defensive sectors would be lagging, and two of the most defensive-oriented sectors in this yield-hungry world we live in are Utilities and Real Estate. Even these two groups, though, are only about 1% from their 50-DMA, so all it will take is one or two good days for these groups to get them back over the hump. On the upside, Health Care Equipment & Services is the furthest above its 50-DMA at 7.72%.

The S&P 500 as a whole is currently just over 4% above its 50-DMA. What’s interesting to note here, though, is that just nine of the 24 Industry Groups are further above their 50-DMAs while 15 are not above their 50-DMAs by as much as the S&P 500. In terms of YTD returns, the S&P 500 is currently sitting on a gain of over 25% YTD. Leading the way higher this year, Tech Hardware (Apple) has rallied just under 48%, while Semis are up just over 40%. Behind these two leaders, four other Industry Groups are up over 30% YTD. While there is no downside on a YTD basis, Energy has been the biggest laggard and is just barely hanging on to a YTD gain. If Energy can’t hang onto a YTD gain in a year where the S&P 500 gains more than 25%, Energy investors may need to wear paper bags over their heads. 

(Click on image to enlarge)

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