The charts above show the performance of each sector relative to all nine sectors combined. XLK tech couldn't be included due to having only 8 panes but it was included in determining the sector ratios. Important to keep in mind that these are ratios, all prices could go lower or higher together but what I'm interested in here is purely the relative performance. Also, in order for one to outperform is ensuring that another sector somewhere is underperforming.
Top Row:
XLU Utilities, XLP Consumer staples, XLF financials and XLV Health are all breaking out on a relative basis. 3 of 4 can be considered defensive sectors. Financials are interesting in that the sector was completely demolished after the 2008 recession and appear to be breaking out of a 5 yr wedge.
Bottom Row:
XLE Energy issues are widely known. Not much to say other then its possible that they go lower longer term and return to previous levels (.10-.12 of the total). The "energy commodities are an asset class" theme may finally be unwound and if so XLE could suffer from underperformance for some time (oversold bounces excluded). XLB materials have not broken down yet but look quite vulnerable. XLY Consumer discretionary did break down and may have recently been saved by the plunge in oil. Any economic weakness and i suspect this will quickly revert and this sector could significantly underperform. XLI Industrials looks like it could break out but has not yet. The transportation portion of this sector has significantly helped this sector.
Summary:
XLU - breaking out upwards, 6 yr wedge
XLP - breaking out upwards, 6 yr wedge
XLF - breaking out upwards, 5 yr wedge
XLV - breaking upper trend line important since 2011
XLE - broke out down, 6 yr wedge, approaching possible long term support
XLB - approaching bottom trend line important since 2002
XLY - broke ascending wedge lower, recently bounced back towards 2013 highs
XLI - sitting at upper trend line that has been important since 2000
XLK - Not shown
Top Row:
XLU Utilities, XLP Consumer staples, XLF financials and XLV Health are all breaking out on a relative basis. 3 of 4 can be considered defensive sectors. Financials are interesting in that the sector was completely demolished after the 2008 recession and appear to be breaking out of a 5 yr wedge.
Bottom Row:
XLE Energy issues are widely known. Not much to say other then its possible that they go lower longer term and return to previous levels (.10-.12 of the total). The "energy commodities are an asset class" theme may finally be unwound and if so XLE could suffer from underperformance for some time (oversold bounces excluded). XLB materials have not broken down yet but look quite vulnerable. XLY Consumer discretionary did break down and may have recently been saved by the plunge in oil. Any economic weakness and i suspect this will quickly revert and this sector could significantly underperform. XLI Industrials looks like it could break out but has not yet. The transportation portion of this sector has significantly helped this sector.
Summary:
XLU - breaking out upwards, 6 yr wedge
XLP - breaking out upwards, 6 yr wedge
XLF - breaking out upwards, 5 yr wedge
XLV - breaking upper trend line important since 2011
XLE - broke out down, 6 yr wedge, approaching possible long term support
XLB - approaching bottom trend line important since 2002
XLY - broke ascending wedge lower, recently bounced back towards 2013 highs
XLI - sitting at upper trend line that has been important since 2000
XLK - Not shown