Key Momentum Shifts

  • Materials (XLB) and Industrials (XLI) Maintain Leadership : Both sectors remain in the Leading quadrant, indicating relatively strong performance and positive momentum.
  • Technology (XLK) and Consumer Discretionary (XLY) Remain in Improving: Both sectors continue to show improving relative momentum, although they have not yet moved into the Leading quadrant.
  • Health Care (XLV) Moves Through Weakening: Health Care remains in Weakening despite gaining 1.67% during the latest session, highlighting a divergence between short-term price performance and broader relative momentum.
  • Energy (XLE) Remains in Weakening: Energy recorded the strongest daily gain at 4.66%, but its RRG positioning remains in Weakening, indicating that its relative momentum has yet to fully recover.
  • Financials (XLF) and Real Estate (XLRE) Remain in Weakening: Both sectors continue to show negative relative momentum, with Real Estate recording the weakest daily performance at -1.29%.
  • Communication Services (XLC) and Utilities (XLU) Remain in Lagging: Both sectors continue to exhibit weak relative strength and negative momentum, indicating that a sustained recovery is required before they can rotate toward Improving.

The latest Relative Rotation Graph (RRG) for 10 August 2026 indicates a selective rotation across the US Equity market. Materials and Industrials remain in the Leading quadrant, while Technology and Consumer Discretionary continue to strengthen within Improving. Meanwhile, Health Care, Consumer Staples, Financials, Real Estate and Energy are positioned in Weakening, while Communication Services and Utilities remain in Lagging. The contrast between daily price performance and RRG positioning is particularly notable for Energy, which surged 4.66% during the latest session while remaining in Weakening, suggesting that its short-term price strength has not yet translated into a stronger relative momentum position.

Momentum Breakdown by Quadrant

US Sector Relative Momentum Chart (at the closing price of 10/08/2026). Powered by: amibroker.com.

Leading Quadrant

  • Materials (XLB) remains in the Leading quadrant, indicating sustained relative strength and positive momentum. The sector gained 0.61% during the latest session, supporting its continued leadership position.
  • Industrials (XLI) also remains in Leading, reflecting relatively strong broader momentum despite declining 0.31% during the latest session. Its RRG position indicates that the sector continues to maintain a favourable relative position compared with the broader US market.

Improving Quadrant

  • Information Technology (XLK) remains in the Improving quadrant, indicating that its relative momentum is recovering. However, the sector declined 0.88% during the latest session, showing that its improving RRG trajectory has not yet translated into positive short-term price performance.
  • Consumer Discretionary (XLY) also remains in Improving, suggesting strengthening relative momentum. The sector declined modestly by 0.16% during the latest session, although its current RRG position indicates potential for further improvement toward Leading.

Weakening Quadrant

  • Health Care (XLV) remains in Weakening despite gaining 1.67% during the latest session. The sector's RRG position indicates that its relative momentum continues to deteriorate compared with the broader US market.
  • Consumer Staples (XLP) remains in Weakening after declining 0.20%. Its current position reflects fading relative momentum despite the relatively modest daily movement.
  • Financials (XLF) remain in Weakening despite gaining 0.36% during the latest session. The sector's RRG position suggests that its relative strength remains under pressure.
  • Real Estate (XLRE) remains in Weakening after falling 1.29%, making it the weakest-performing sector during the latest session. Its position highlights continued relative weakness.
  • Energy (XLE) remains in Weakening despite surging 4.66%, the strongest daily performance among all eleven sectors. The combination of strong short-term price performance and a Weakening RRG position highlights a significant divergence between daily gains and broader relative momentum.

Lagging Quadrant

  • Communication Services (XLC) remains in the Lagging quadrant after gaining 0.52% during the latest session. The sector continues to exhibit weak relative momentum compared with the broader US market.
  • Utilities (XLU) also remain in Lagging despite declining 1.10%. Its current RRG position indicates that the sector continues to experience weak relative strength and negative momentum.

Strategic Summary

The latest Relative Rotation Graph highlights a selective rotation within the US equity market, with Materials and Industrials continuing to lead while Technology and Consumer Discretionary strengthen within Improving. These sectors could potentially move toward stronger leadership if their relative momentum continues to improve.

At the same time, Health Care, Consumer Staples, Financials, Real Estate and Energy remain in Weakening, indicating deteriorating relative momentum. Energy is particularly notable because its 4.66% daily gain was substantially stronger than every other sector, yet its RRG position remains in Weakening. This suggests that the recent price surge has not yet been sufficient to reverse its broader relative momentum trend.

Communication Services and Utilities remain in Lagging, indicating that these sectors continue to require stronger relative performance before a rotation toward Improving becomes evident. Overall, the RRG continues to point to selective sector rotation rather than broad-based leadership across the US equity market.