ELEMENT SQUARED PRIVATE WEALTH
Daily Market Pulse
Thursday, March 13, 2026
MARKET REGIME
⚡ CHOP
Composite Score: -29.0 — Slow grind lower continues
|
Short-Term RISK OFF Score: -70 |
Medium-Term RISK OFF Score: -58 |
Long-Term CHOP Score: +21 |
The slow grind lower continues. The composite score has slipped further to -29, now the lowest reading of this correction. SPY bounced modestly to $669.90, but the RSI at 40 and VIX at 24.9 show no real conviction behind the move. Breadth remains anemic — only 25% above the 20-day MA and 31% above the 50-day. The 200-day breadth holding at 47% is the last line of structural defense, and it’s thinning by the day.
Sector Leadership
Consumer Staples rejoins the leaders as the market leans further into defensives:
| Sector | Regime | Score | Trend |
|---|---|---|---|
| 🛢️ Energy | RISK ON | +97 | Still at 52-week high, 100% above 200d MA |
| ⚡ Utilities | RISK ON | +89 | Strengthening — 100% above 50d MA, near 52-week high |
| 🛒 Consumer Staples | RISK ON | +31 | Back in RISK ON — MT/LT strength despite ST oversold |
| 🏠 Real Estate | CHOP | +24 | Holding steady, MT/LT structure intact |
| ⛏️ Materials | CHOP | +17 | RSI 19 deeply oversold, but LT structure holds at 75% >200d |
| 🏭 Industrials | CHOP | +14 | Still struggling — RSI 33, below 50d MA, only 16% above 20d |
| 📡 Comm Services | CHOP | 0 | Dead neutral — below 50d MA, downtrend forming |
| 💻 Technology | CHOP | -18 | Only 24% above 50d MA — barely clinging to 200d support |
| 💊 Healthcare | CHOP | -19 | RSI 32 oversold, only 12% above 20d MA |
| 🛍️ Consumer Disc. | RISK OFF | -47 | 10% off highs, below 200d MA — structural breakdown |
| 🏦 Financials | RISK OFF | -69 | MT score hits -100, 3m return -10% — worst sector by far |
💡 What We’re Watching
- Consumer Staples returns to RISK ON — After slipping to CHOP yesterday, Staples has regained its footing with a +31 score. The medium and long-term structure is solid (55% and 75% breadth), even as short-term conditions remain oversold. The defensive bid is broadening.
- Utilities surging to +89 — Up from +73 yesterday, Utilities now boasts 100% of stocks above the 50-day MA and 95% above the 200-day. This sector is less than 1% from its 52-week high. When Utilities lead this aggressively, it tells you the market is in full defensive mode.
- Financials MT score hits -100 — The maximum bearish reading on the medium-term timeframe. The 3-month return is now -10%, only 12% of stocks above the 50-day MA, and the sector is 13% off its highs. This is no longer a pullback — it’s a sector in crisis.
- Consumer Discretionary now 10% off highs — Trading 3.2% below its 200-day MA with only 25% of stocks above it. The consumer is clearly under pressure, and this sector is confirming the slowdown narrative.
The Bottom Line
The market continues to sort itself into clear winners and losers. The winners are all defensive — Energy, Utilities, and now Consumer Staples. Three of the 11 sectors are in RISK ON, and all three are traditionally defensive or commodity-linked. That’s a late-cycle playbook.
Meanwhile, the laggards keep lagging. Financials hitting a -100 medium-term score and Consumer Discretionary breaking below the 200-day are not signs of a healthy market taking a breather — they’re signs of real economic concern being priced in.
Our stance remains unchanged: capital preservation first. Mean reversion setups offer short-term opportunity for nimble traders, but the broader trend has not reversed. Stay in quality, stay defensive, and wait for the market to prove itself.
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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