Sector-level trends are deteriorating - every previous time this happened this year, the S&P 500 went on to make new lows.
More Context: Our sector-level trend indicator looks at momentum, price and breadth trends across the 11 S&P 500 sectors. It captures the breadth of these trends more than the intensity (the table inside the report shows the details). The mix of trends has ebbed and flowed by indicator and by sector this year. But every previous time the composite indicator has dropped below zero since the S&P 500 peaked in January, new lows have followed. If that pattern holds, the S&P 500 could soon find itself testing its October low (which is not what many of the seasonal studies would suggest is likely right now).
In our Market Notes, we take a Deeper Look at the price evidence arguing for & against a test of the Q4 lows and what that could mean in the context of a challenging longer-term trend environment.
