ELEMENT SQUARED PRIVATE WEALTH
Daily Market Pulse
Wednesday, March 12, 2026
MARKET REGIME
⚡ CHOP
Composite Score: -27.0 — Conditions deteriorating across timeframes
|
Short-Term RISK OFF Score: -60 |
Medium-Term RISK OFF Score: -58 |
Long-Term CHOP Score: +21 |
The selloff is deepening. Markets remain in a choppy regime but conditions are worsening — the composite score has dropped to -27, down from -20 yesterday. The long-term timeframe has now slipped from RISK ON to CHOP, a notable shift. SPY is down to $667.77, now 4% off its 52-week high, with the RSI falling to 33 (approaching oversold). The VIX has climbed back to 26.1, and breadth is eroding further — only 25% above the 20-day MA, 32% above the 50-day, and 47% above the 200-day.
Sector Leadership
Energy continues to surge ahead of everything else, while the rest of the market weakens:
| Sector | Regime | Score | Trend |
|---|---|---|---|
| 🛢️ Energy | RISK ON | +97 | Surging — RSI 70, at 52-week high, 100% above 200d MA |
| ⚡ Utilities | RISK ON | +73 | Defensive strength building, 95% above 50d & 200d MA |
| 🏠 Real Estate | CHOP | +21 | RSI 27 oversold, but MT/LT structure holds |
| 🛒 Consumer Staples | CHOP | +15 | Fading — only 10% above 20d MA, 3m gains eroding |
| 🏭 Industrials | CHOP | +14 | Dropped from RISK ON — RSI 28, now below 50d MA |
| ⛏️ Materials | CHOP | +11 | RSI 18 deeply oversold, below 50d MA |
| 📡 Comm Services | CHOP | -2 | Slipping — below 50d MA, downtrend forming |
| 💊 Healthcare | CHOP | -16 | Weakening — only 8% above 20d MA, below 50d MA |
| 💻 Technology | CHOP | -20 | Only 20% above 50d MA — growth trade remains broken |
| 🛍️ Consumer Disc. | RISK OFF | -43 | Now below 200d MA — structural breakdown underway |
| 🏦 Financials | RISK OFF | -68 | Cratering — 7% below 200d MA, only 25% above it, -13.2% from high |
💡 What We’re Watching
- Energy is in a league of its own — A +97 composite score, RSI of 70, and sitting right at its 52-week high. With 100% of stocks above the 200-day MA, this is the strongest sector we’ve seen in this cycle. The question is whether it’s getting extended.
- Industrials lost its RISK ON status — Yesterday Industrials was one of three sectors in RISK ON territory. Today it’s dropped to CHOP (+14) as RSI hit 28 and the sector fell below its 50-day MA. The market is narrowing to just Energy and Utilities as leaders.
- Long-term timeframe is cracking — The long-term composite dropped from +33 to +21 and shifted from RISK ON to CHOP. With SPY now 4% off highs and only 47% of stocks above their 200-day MA, the structural support that was holding the market is weakening.
- Financials accelerating to the downside — Now 13.2% off highs and 7% below the 200-day MA, with only 25% of stocks above it. This sector has gone from weak to broken. Credit stress signals are intensifying.
The Bottom Line
Today marks a notable deterioration. The long-term timeframe shifting to CHOP and Industrials losing RISK ON status narrows the market’s leadership to just two sectors — Energy and Utilities. That’s not a healthy market; that’s a market hiding in defensives and commodities.
With SPY’s RSI at 33, we’re approaching oversold territory where mean reversion setups historically perform well (65% win rate, +2.3% avg 10-day return). But this is for surgical, short-term trades only — not a signal to get aggressive. The deterioration alert remains firmly active, and the trend is clearly pointing lower until proven otherwise.
Capital preservation remains the priority. Stay defensive, keep position sizes small, and let the market show you a bottom 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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