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Significant Rotation Out of Defensives

While the Dow is up nearly 100 points today, the four main defensive sectors -- Health Care, Utilities, Telecom, Consumer Staples -- are either flat or down on the day.  This rotation out of defensives has been going on for about two weeks now, and it's indicative of an investor class willing to take on more risk.  As the 10-year Treasury yield has spiked this week, high dividend paying stocks have been hit especially hard.  With such significant rotation out of defensives, the market is at least set up to make another nice leg higher.  

The rotation out of defensives can be seen in our sector trading range table below.  As shown, Consumer Staples, Health Care and Telecom are the least overbought of the bunch, while the Utilities sector has actually moved well below its 50-day moving average!   

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