SMO Insights Tue 2026-10-13: Phase -3 Bearish Advanced -94.1% (New Bearish Phase)

SMO Insights Tue 2026-10-13: Phase -3 Bearish Advanced -94.1% (New Bearish Phase)
Sector Strength Terrain Clock showing Phase +1 Bullish New. Seventeen bearish industries are in Bearish Advanced and ten are in Bearish Maturing. No bullish industries are on the verge of flipping to bearish and nine bearish industries are close to switching to bullish. Other than Communications, all sectors are uniformly weak.

See About for more detailed background to this analysis.

Nine bearish industries are on the verge of flipping to bullish as the internal market rotation potentially gains steam. Today's bearish flip was because of bullish industries flipping to bearish. New Bearish Phase Market Strength Score today at -94.1%. The previous Bullish phase lasted six days and the previous bearish phase was seven days.

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 extremes are 75.2% on 2026-04-21 and -96.4% on 2026-10-01.

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, 2026-10-13: The Market Strength Score is -94.1%. Of the 40 industries tracked, 3 are bullish and 37 are bearish. Bullish industry scores range from 1% to 8%, led by Textiles. Bearish industry scores range from -4% to -89%, with Forest/Paper the weakest. At the sector level, 0 of 11 sectors are bullish and 11 are bearish.

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 Industry Strength Scores Ranked, 2026-10-13: With the Market Strength Score at -94.1%, the 40 industries rank from Textiles at the top (8%) to Forest/Paper at the bottom (-89%). Bullish phases: 3 in Phase +1 Bullish Aggressive. Bearish phases: 10 in Phase -1 Bearish Normal, 17 in Phase -2 Bearish Normal, 10 in Phase -3 Bearish Conservative. Strongest 3: Textiles (8%), Business Products (7%), Restaurant (1%). Weakest 3: Forest/Paper (-89%), Aerospace/Defense (-88%), Gaming (-88%).

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.

SECTORS (all stocks): Strongest 4Strong = ENRG | Weakest 7Weaker = BMTL, REAL | 7 strengthened / 4 weakened vs prior week | 1-wk avg return best ENRG +3.2%, worst BMTL -3.8%. SECTOR ETFs (constituents only): Strongest 3Stronger = XLE | Weakest 7Weaker = XLRE | 10 strengthened / 1 weakened | 1-wk avg return best XLE +4.9%, worst XLK -2.6%. Avg rating 5.3 vs 5.7 for all stocks (1=Strongest, 9=Weakest): ETF constituents are STRONGER than the broad sector universe.

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.
MID-LEVEL SUMMARY (2026-10-13): 40 sub-industries | Strongest 3Stronger = OIL (ENRG) | Weakest 8VWeak = FORES (BMTL), PREC (BMTL), AERO (INDS) | 24 strengthened / 15 weakened / 1 unchanged vs prior week. 1-WK AVG RETURN: Best OIL +5.4%, REST +3.2%, TEXT +3.1% | Worst SEMI -10.4%, META -9.1%, AERO -6.0%. VS PARENT SECTOR: Standouts (2+ levels stronger) STEEL 4Strong vs BMTL 7Weaker | Laggards (2+ levels weaker) AERO 8VWeak vs INDS 6Weak. SPECIALTY GROUPS: IYR 7Weaker↑, MAG7 2VStrong↑, AISpQntm 5Average↓, IGV 4Strong↑, SOXX 4Strong↓ (↑ strengthened, ↓ weakened vs prior week).
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.
DETAILED-LEVEL SUMMARY (2026-10-13): Broadly Strengthened: CNNC (10↑/0↓), ENRG (11↑/0↓), REAL (13↑/0↓), UTIL (11↑/0↓) Mixed leaning Strengthened: CNCY (35↑/12↓), FINA (11↑/6↓), HCAR (10↑/4↓) Mixed: COMM (4↑/5↓), TECH (10↑/12↓) Mixed leaning Weakened: INDS (10↑/18↓) Broadly Weakened: BMTL (1↑/17↓)Overall: 126 strengthened vs 74 weakened (63% strengthened). Weakest rating occupied (9Weakest): -MortgFin (FINA, 4) Strongest rating occupied (2VStrong): -Publishng (COMM, 6), -BevWinery (CNNC, 3), -ElecCmpDs (INDS, 7), MAG7 (MAG7, 7), -ConsElec (TECH, 3)

SMO Ranked Reports

The following provide strongest to weakest ranked views of the 11 Sector ETFs, 46 industries, and 149 sub-industries.

Sector ETFs Ranked Report

Ten of the 11 ETFs strengthened for the week with XLK Technology the lone weakener as XLE Energy takes over the strongest ranking at 3Stronger. XLRE Real Estate is weakest at 7Weaker.

Industry Ranked Report

Only one 3Stronger industry (Oil) and two 4Strong (Software, Steel/Iron). Three 8Very Weak (Forest Paper, Precious Metals, and Aerospace Airlines) and nine 7Weaker industries, three of which strengthened this week.

Sub-Industry Ranked Report, Strongest and Weakest Only

The sub-industries report shows only those ranked 3Stronger, 2Very Strong, 1Strongest, 7Weaker, 8Very Weak, and 9Weakest.

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