Charts of the Day: Why We Care About Sector Breadth

If you’re at all wondering what keeps me harping on nearly every day lately about the poor sector breadth I’m noticing, well, Bespoke Investment Group — having noticed it as well — put some history to it this morning.

Apparently, over the past 30 years there have only been 3 that have seen a larger gap separating the best and the worst performing sectors as of the 15th trading day in (today):

Per the chart, they were:

2000,

2001,

and 2009.

As you can see, 2 of the 3 turned out nasty. While the 1 that turned out nicely positive (coming off of the 07-09 57% decline), nevertheless saw a nasty selloff during the first quarter…

In terms of the 3 that came very close — 1992, 1999 and 2006 — all finished the year higher, but only after an immense amount of volatility during the first half+:

1992:


1999:


2006:

Of course we know what came in the years immediately after 1999 and 2006: 

1/1/2000 to 3/9/2003:


1/1/2007 to 3/9/2009:

And, frankly, the 2 years following 1992 episode weren’t much to write home about either:

Stay tuned… and stay hedged!!
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