Sector Rotation

Bespoke Investment Group on market rotation in the first quarter:

"….As shown, the S&P 500 as a whole had 68% of its stocks above their 50-day moving averages at the end of February, and 67% are above their 50-days with one day left in March -- basically unchanged.  On a sector basis, however, there has been a real shift over the last month.  

As shown, Health Care, Consumer Discretionary and Technology were big leaders coming into March, and they all had more than 70% of their stocks abover their 50-days.  These three sectors have been weak lately, though, and now they have the worst breadth readings in the market.  Health Care is a real standout due to Biotech's recent fall.  At the end of February, 83% of Health Care stocks were above their 50-days, ranking it second behind Utilities for the strongest breadth reading.  Now just 46% of Health Care stocks are above their 50-days, which is the worst reading of any sector…... 

…..March has been a month of rotation out of what had been working into what had not been working.  As we head into April, the big question is whether this shift is a short-term mean reversion trade or the start of a longer-term trend….."

Link:  Bespoke Investment Group:  Sector Rotation in March.

*Long certain of the ETF sectors mentioned above either individually or in client accounts.