Inside Markets — Higher Bond Yields – for now

The majority of SPX sectors have reached short-term oversold territory over the past two weeks. In our view, the widely followed negative breadth over the last 12 sessions was the result of 8 sectors burning off overbought conditions. Of the sectors now in oversold territory, Financials and Industrials (both cyclical) are showing signs of decelerating downside momentum while maintaining bullish long-term pattern progress. A near-term reversal in these sectors (hasn’t happened yet) would be an opportunity to add exposure.