Sector Analysis

The S&P 500 is down -15.9% year-to-date, down -10.4% over last 3 months and down -8.8% over last 1 month. The Dow Jones and the NASDAQ have had similar returns. I wanted to look at the individual sectors to assess which sectors are doing better or worse than the overall markets using the S&P 500 as the benchmark.

Here are how the 15 sectors that I track look like:

As is expected, there are a lot of reds in the chart. Aside from Energy every other sector has been hit hard and it is a broad-based downturn seen since the beginning of this calendar year.

There are 6 sectors that have performed worse than the overall S&P 500 over 1 month. These are Metals, Financials, Consumer Staples, Real Estate, Retail and Biotech. Metals and Biotech have been the worst hit over the last 1 month. Biotech has been performing bad for a while now, so the returns are understandable. However, Metals had been running positive through this year until their nosedive this month.

The NASDAQ has fallen harder than the S&P 500. Over 1 month it is down -12.6%, over 3 months it is down -17.4% and over the year-to-date it is down -25.5%. Compared to that, the XLK (which is the S&P 500 Technology sector) has fared a little better. It is down -8.2% over 1 month, down -15.2% over 3 months and down -22.6% over the year-to-date.

The chart below compares the performance of NASDAQ, XLK and QQQ.

As we can see the NASDAQ and QQQ (NASDAQ 100) performs quite similar to each other. The XLK has done a little better. The 2 instruments that I use to trade the Technology sector is the TQQQ which is the 3x leverage the QQQ and the TECL which is the 3x leverage of Technology.

But for now, I am just going to wait and watch to see what happens next. There are still some signs of a bounce back, but I need to see confirmation through the indicators to get in.