How to read sector performance
The S&P 500 is divided into 11 sectors under the Global Industry Classification Standard (GICS). Each is tracked here through its Select Sector SPDR ETF — XLK for technology, XLF for financials, XLE for energy and so on — which holds the S&P 500 companies in that sector, weighted by size. Comparing them shows where money is flowing inside the market, not just whether the market is up or down.
Cyclical and defensive sectors
Sectors tend to behave in two broad groups. Cyclical sectors — technology, consumer discretionary, industrials, financials, materials and energy — depend on economic growth and usually lead when investors expect expansion. Defensive sectors — utilities, consumer staples and health care — sell necessities, so their earnings hold up in slowdowns and they tend to outperform when investors turn cautious. When defensives lead the market, it is often read as a risk-off signal.
Reading the rotation map
The rotation map plots each sector’s performance relative to the S&P 500: across, how far it has out- or under-performed over three months; up, the same over the last month. Top-right sectors are leading on both horizons. Bottom-right are weakening — still ahead over three months but losing ground lately. Bottom-left are lagging, and top-left are improving — behind over three months but gaining recently. Leadership tends to move around the map clockwise, and the tails show which way each sector is heading.
The timeframe buttons stretch both horizons together: 3M compares the past year with the past three months, 6M two years with six months, and 1Y three years with one year, with tails stepping a week at a time. Short timeframes catch rotations as they start; long ones show the slower cycles that played out over years.
Relative volume
Relative volume compares today’s trading in an ETF with its 20-day average. A big move on heavy volume (well above 1×) carries more conviction than the same move on light volume, which is why lightly traded sectors are faded on the one-day chart.
Options and fear by sector
Implied volatility is the size of move the options market is pricing. IV rank puts today’s level in the context of the past year: a sector near 100 has more fear priced than at any point that year, one near 0 is unusually calm. Spikes in a single sector’s IV rank often come before or during news specific to that industry.