SMO Insights Mon 2026-08-31: Phase -2 Bearish Maturing -77.8% (-4.9%)

Brian Degracia

01 Sep 2026 • 4 min read

Sector Strength Terrain Clock: day 10 of the current bearish phase. On the bullish ledger, three industries are +2 Bullish Maturing. Twelve industries are in Phase -2 Bearish Maturing. Three bullish industries are ready to flip bearish and three bearish are ready to flip to bullish. The Communications, Energy, and Healthcare sectors are uniformly strong. The Utilities sector is uniformly weak and both Consumer Cyclical and Financial are close to uniformly weak.

See About for more detailed background to this analysis.

The Market Strength Score is in day 10 of a new bearish phase, previous bullish phase was 3 days. Index levels didn't betray much weakness, last week of summer should be slow, but there was a large negative move in the MSS getting it closer to Phase -3 Bearish Advanced territory.

Goal: objectively determine what to do and when in the U.S. stock market
How: top-down, inside-out, and bottom-up market, sector, industry, sub-industry, and stock analysis; three unique tools 1) Market Strength Score, 2) Sector Strength Terrain Clock, 3) Strength Spectrums
Example actions: long vs. short, trend follow vs. mean revert, aggressive vs. conservative, days vs. weeks expected holding period
Basis: where are there strength pockets and how much may remain

Tools:
1. Sector Strength Terrain Clock, a single-day snapshot plotting sector and industry strength and the current Market Strength Score within the Six-Phase framework
2. Market Strength Score Gauge, a one year comparison of the Market Strength Score and the S&P 500
3. Industry Strength Scores by Sector showing comparative alphabetical views of sector and industry strength
4. Industry Strength Scores Ranked which groups the strongest and weakest industries to identify pockets of least and most extended setups
5. Sector and Sector ETFs High-Level Reports showing Strength Spectrums for the 11 sectors and the 11 sector ETFs
6. Sector Mid-Level and Detailed Reports showing Strength Scores and Strength Spectrums for sectors, industries, and sub-industries
7. Ranked Reports clearly showing where is the strength and weakness at the sector ETF, industry, and sub-industry levels

SMO Market Strength Score Gauge

Provides 12 month context against prior scores and the S&P 500 for today's MSS.

The one year MSS high is 76% (2025-09-18) and low is -95% (2026-03-20).

SMO Industry Strength Scores by Sector

The sectors are listed alphabetically and below each are their component industries listed alphabetically. The Six Phase thresholds are labeled along with the current Market Strength Score. This reveals sector strength breadth and depth.

SMO Industry Strength Scores Ranked

The industries are listed based on strength score, first strengthening industries then weakening industries. The Six Phase thresholds are labeled along with the current Market Strength Score. This reveals the least and most extended industries.

SMO Sector and Sector ETFs High-Level Reports

The Sector Report lists the strength spectrum readings for the 11 sectors. The Sector ETFs Report lists the strength spectrum readings for the 11 sector ETFs. Each report also shows the combined strength spectrum for all stocks in this universe and for the major indexes S&P 500 and NDX.

This provides a broad overview of market strength and weakness pockets.

August 31 note: market is expanded, the strongest level is 3Stronger (XLE) and weakest is 8Very Weak (XLU).

SMO Sector Mid-Level and Detailed Reports

The following Sector Mid-Level and Detailed Reports provide more refined market strength pockets, potential relative lasting power for these strengths, and a logical foundation for potential stock-/option-specific actions.

The Sector Mid-Level Report below lists the strength spectrum readings for all stocks and the major indexes S&P 500 and NDX, then lists the same for key sectors and sector ETFs.

August 31 note: "Curr vs 1WA (1 week ago) Status" showing widespread weakness but Energy strengthened as did pockets in Technology. IGV Software has momentum, strengthening into 3Stronger. Former leader Precious Metals weakened into 3Stronger while XLE strengthened into 2Very Strong.

The Sector Detailed Report below expands upon the Sector Mid-Level Report by overlaying the Sector Strength Terrain Clock Industry Strength Scores and adding industry and sub-industry detail.

August 31 note: negative and still declining Market Strength Score keeping a damper on new longs.

SMO Ranked Reports

The following provide strongest to weakest ranked views of the 11 Sector ETFs, 46 industries, and 149 sub-industries. The sub-industries report shows only those ranked 3Stronger, 2Very Strong, 1Strongest, 7Weaker, 8Very Weak, and 9Weakest.

Sector ETFs Ranked Report

Industry Ranked Report

Sub-Industry Ranked Report, Strongest and Weakest Only

For educational purposes only. These are not stock or investment recommendations. See this disclaimer.