Don't Ignore This Chart!

When You Enter 288 Numbers, This Is What You Get

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Collective Seasonality for US sectors

But What is it Showing?

The chart above shows the collective seasonality of all 11 sectors in the S&P 500.

To get there, I collected the numbers from the seasonality chart (which is available on the site) for every sector and the S&P 500 over the past 20 years (the maximum lookback period). I then punched all these numbers (288 indeed) into a spreadsheet and created this 3D-column chart. By visualizing these data in this way, we can get a view of the seasonality across the entire universe.

Seasonality is a very helpful tool/metric to get some guidance on what usually/on average happens with a sector on a forward-looking basis. As with all tools that we have in our toolkit, there is no certainty. They are all providing us with pieces of the puzzle.

Combining with RRG

Weekly RRG for US sectors highlighting XLV

The combination of various tools is what provides us with insight. Obviously, I want to combine things with a Relative Rotation Graph. When I run the RRG for US sectors, XLV seems well positioned to enter the new year on a positive note.

Of course, there are still a few weeks left in this year, but the combination of a strong rotation on the Relative Rotation Graph and an outperformance of SPY in 14 out of 20 months (of January) over the last 20 years (average outperformance 1.2%) suggests a good relative start in 2020 for the Health Care sector.

There are a lot more possibilities with this type of visualization, which I am planning to show/explain in a separate RRG blog or Sector SpotLight video soon. Stay tuned.

--Julius



My regular blog is the RRG Chartsblog. If you would like to receive a notification when a new article is published there, simply "Subscribe" with your email address.

Julius de Kempenaer

Senior Technical Analyst, StockCharts.com

Creator, Relative Rotation Graphs

Founder, RRG Research


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Feedback, comments or questions are welcome at Juliusdk@stockcharts.com. I cannot promise to respond to each and every message, but I will certainly read them and, where reasonably possible, use the feedback and comments or answer questions.

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RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered trademarks of RRG Research.

Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More
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