ELEMENT SQUARED PRIVATE WEALTH
Daily Market Pulse
Tuesday, March 11, 2026
MARKET REGIME
⚡ CHOP
Composite Score: -20.0 — Mixed signals across timeframes
|
Short-Term RISK OFF Score: -50 |
Medium-Term RISK OFF Score: -58 |
Long-Term RISK ON Score: +33 |
Markets remain in a choppy regime with both short and medium-term timeframes flashing RISK OFF, while the longer-term structure still holds. The VIX has eased slightly to 24.2 from yesterday’s 25.4, but breadth continues to deteriorate — only 28% of stocks above their 20-day moving average and 36% above the 50-day. The 200-day picture is more balanced at 50%, signaling a market that hasn’t broken down structurally but is under clear stress on shorter timeframes.
Sector Leadership
The defensive rotation theme continues, with commodity and rate-sensitive sectors leading:
| Sector | Regime | Score | Trend |
|---|---|---|---|
| 🛢️ Energy | RISK ON | +91 | Dominant leader |
| ⚡ Utilities | RISK ON | +60 | Steady defensive strength |
| 🏭 Industrials | RISK ON | +39 | MT/LT strength intact despite ST oversold conditions |
| 🛒 Consumer Staples | CHOP | +30 | Defensive bid fading short-term |
| 🏠 Real Estate | CHOP | +21 | Rate-sensitive pullback, trending positive medium-term |
| 📡 Comm Services | CHOP | +17 | Holding near highs but mixed breadth |
| ⛏️ Materials | CHOP | +15 | Commodity tailwind offset by ST weakness |
| 💊 Healthcare | CHOP | +4 | Neutral — neither leading nor lagging |
| 💻 Technology | CHOP | -5 | Growth trade still under pressure |
| 🛍️ Consumer Disc. | RISK OFF | -39 | Consumer weakness deepening |
| 🏦 Financials | RISK OFF | -62 | Weakest sector — credit stress persists |
💡 What We’re Watching
- Energy still dominates — A +91 composite score with perfect breadth (100% above 50d and 200d MA) makes Energy the undisputed leader. The sector is less than 0.1% from its 52-week high.
- Financials in freefall — The weakest sector dropped further to -62 with a staggering 96% of stocks below their 20-day moving average. Down 12% from highs, this is the clearest sector to avoid.
- Short-term breadth is ugly — Only 28% of the Russell 1000 sits above its 20-day MA, signaling widespread near-term selling pressure. But the 200-day breadth at 50% suggests this is still a correction, not a collapse.
- Deterioration alert active — With both short and medium-term timeframes in RISK OFF territory while the long-term barely holds, history tells us this setup often precedes further downside. Caution is warranted.
The Bottom Line
The defensive rotation that began last week shows no signs of reversing. Energy, Utilities, and Industrials continue to lead while Technology, Consumer Discretionary, and Financials remain under pressure. The slight VIX improvement (25.4 → 24.2) offers a glimmer of hope, but breadth hasn’t confirmed a bottom.
This remains a stock-picker’s market. Quality names in leading sectors are the focus, while overexposure to lagging growth and financial names carries elevated risk. With the deterioration alert still active, this is not the time to be aggressive — protect capital first, and let the market prove itself before adding risk.
This commentary is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results. Contact us to discuss how these market dynamics may affect your portfolio.
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