Sector Rotation: Technology Leads the Week, Z-Score -0.99

Financial XLF led the week's sharpest downside rotation and Technology XLK tops the Leading quadrant.

Dispersion across the eleven S&P 500 sector ETFs sits in a normal regime as of September 25, a stock- and sector-selection market. The z-score against the GARCH-normalised mean is -0.99, and the spread narrowed marginally over the past five sessions. The widening is recent.

Health Care XLV and Communication Services XLC posted the strongest upside rotations and strengthened inside the Leading quadrant. Technology XLK leads the week at +0.53 and occupies the Leading quadrant. Its 20-day (tactical) and 13-week (intermediate) lines are both positive. Industrial XLI climbed to fourth from a lagging base, an unconfirmed rebound with mild 13-week drag. Materials XLB rounded out the top half at fifth. Its weekly rotation turned lower from a lagging base.

Financial XLF led the sharpest downside rotation and ranks eighth, after the steepest negative turn in the field. Utilities XLU finished last at -0.72 and deteriorated on both horizons from a lagging base. Energy XLE posted the sharpest rank fade, down seven places to tenth; its 13-week line is strong, and the weekly reading turned negative. Real Estate XLRE joined the lagging downside cluster at ninth. Five of the eleven sectors hold positive current-week readings.

Sector Rotation Map

Romain Gandon
CEO, Quantlake

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results.