SMO Insights Thu 2026-08-19: Phase -2 Bearish Maturing -65.0% (-10.4%)

Brian Degracia

20 Aug 2026 • 3 min read

Sector Strength Terrain Clock: day 2 of a new bearish phase. On the bullish ledger, one Financial industry (Banking) is +3 Bullish Advanced stage and two are +2 Bullish Maturing with the remainder in Phase +1 New. Seven industries are in Phase -2 Bearish Maturing while none are in Phase -3 Bearish Advanced. Five bullish industries ready to flip bearish and four bearish are ready to flip to bullish. The Communications and Energy sectors are uniformly strong. The Utilities sector is uniformly weak.

See About for more detailed background to this analysis.

The Market Strength Score is in day 2 of a new bearish phase, previous bullish phase was 3 days. Full detail below.

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

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.

55% of the industries are bullish/strengthening with leaders Banking is at 86% in +3 Bullish Advanced, with two in +2 Bullish Maturing (Precious Metals at 54%, and Oil Services at 52%). Utilities (-52%, unchanged) has uniformly weakening industries.

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.

Banking is Bullish Advanced at 86% while the four most extended bearish industries are Leisure, Electric Utilities, Automotive, and Semiconductors.

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.

Mixed strengthening/weakening. For the full sectors, Energy and Healrhcare lead at 3Stronger and Utilities is weakest at 6Weak. For the ETFs, XLE/Energy leads at 2Very Strong while XLU/Utilities is weakest at 7Weaker.

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.

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.

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