The Sector Edge - Dec. 15, 2025

Stephen Suttmeier
Dec 15, 2025
15 min read

*** Please see the bottom of this report for important disclaimers and disclosures.***

Solid sector breadth month-to-date, XLF, KRE, XLI, and MOO

Broad-based sector breadth and leadership month-to-date in December

The S&P 500 (SPX) is down 0.32% month-to-date (MTD) in December, but eight of the 11 GICS level 1 sector ETFs are positive MTD and beating the SPX. This corroborates the bullish breadth signals highlighted last week (Dec 12 The Chart Check). Financials, Discretionary, and Industrials are the standout leaders with MTD rallies of 2.00% or more and new weekly closing basis 52-week highs last week. The MTD laggards are the more defensive sectors of Real Estate, Healthcare, and Utilities, with the latter sector down 5.48% MTD.

Tactical Sector Ranks

Top Five Tactical Sector Ranks: Healthcare (XLV), Technology (XLK), Discretionary (XLY), Communication Services (XLC), and Financials (XLF). XLF replaces Energy (XLE) in the top five. Only XLK, XLC, and XLF also appear in the top five of the 52-week Ranks.
Bottom Five Tactical Sector Ranks: Real Estate (XLRE), Utilities (XLU), Consumer Staples (XLP), Materials (XLB), and Energy (XLE). XLE replaces Financials in the bottom five. Four of these – XLRE, XLP, XLB, XLE – also rank in the bottom five of the 52-week Ranks.

Financials (XLF): Breakout and retest with upside potential to 61.25

XLF defended its rising 26- and 40-week moving averages (WMAs), keeping the breakout from January-June bullish consolidation pattern intact with upside potential to the pattern count at 61.25. The pattern remains firmly bullish for XLF while above its 13-, 26-, and 40-WMAs from 53.12 down to 51.51 and chart support near 51. Although Financials still have plenty of work to do in order to suggest a sustained leadership trend, the sector has had bullish rotation versus the SPX since its late October relative price low, which is underpinning this group.

Regional Banks (KRE): Bullish cup and handle breakout watch

Similar to the SPDR S&P Bank ETF (KBE) (Dec 8 The Sector Edge), the SPDR S&P Regional Banking ETF (KRE) is also on bullish cup and handle breakout watch. Improving 13-, 26-, and 40-week moving averages (WMAs) from 62.44 to 59.85 reinforce the developing handle after KRE defended the 38.2% to 50% retracements of the April-September rally from 59.36 to 57.01. It would take a decisive breakout above 65.57-66.97 (pattern neckline) for confirm this pattern and favor upside beyond the late 2024 and mid 2022 highs at 68.83-70.25 toward 77.45-78.78 (100% extension and January 2022 peak), 82.79 (another 100% extension), and 86.50 63.74 (pattern count).

Industrials (XLI): Defends support to refocus upside potential toward 176

XLI firmed up after defending rising weekly moving average (WMA) and chart supports on the late November downward probe into the upper 140s. The sector is attempting a tactical breakout above the prior highs from late October and late July at 155-157. Sustaining this breakout would shift the focus back on the pattern count for the late 2025-mid 2025 bullish consolidation at 176. Until then, continuing to defend the rising 13-, 26-, and 40-WMAs from 153.20-151.75 (13- and 26-WMAs) down to 145.57 (40-WMA) would keep the overall pattern constructive.

Agribusiness ETF (MOO): H&S bottom breakout watch

We flagged a bullish setup for the VanEck Agribusiness ETF (MOO) in our Oct 20 The Sector Edge. This pattern continues to develop with the potential for an upside breakout from a head and shoulders (H&S) bottom dating back to late 2023. Continued closes above improving 13-, 26-, and 40-week moving averages (WMAs) at 73.42-71.79 would bode well for this bullish setup. A decisive rally above 76 would confirm it for initial upside to 78.53-79.15 (38.2% retracement of the 2022-2025 decline and falling 200-WMA) and then higher toward 84.38 (50% retracement) and 90.23-92.00 (61.8% retracement and H&S bottom pattern count). If MOO begins to struggle, the recent low and 38.2% retracement of the April-August rally at 69.67-69.32 offer additional support.

Sector Ranks and Scores

S&P 500 GICS Level 1 Sector ETF Ranks and Scores

We evaluate the relative strength and momentum of S&P 500 GICS Level 1 sector ETFs using a multi-dimensional ranking approach. This analysis incorporates both short-term and long-term performance metrics to identify sector leadership and underperformance. Key inputs include Tactical Rank, 52-week Rank, Trend Scores, and Long-term Trend Scores. Trend Scores are evaluated on both an absolute price basis and relative to the S&P 500 (SPX) benchmark. Combined, these indicators provide a comprehensive view of each sector’s technical condition and trend durability across multiple timeframes.

Key Indicators

Tactical Rank: Uses three short- to intermediate-term weekly simple moving averages (WMAs) to determine the rank: The 13-, 26-, and 40-WMAs. Longer WMAs carry greater weight in the ranking.
52-week Rank: Calculated using the 52-week rate of change to assess longer-term strength.
Trend Score: Ranges from -10 to +10 and incorporates the 13-, 26-, and 40-WMAs. Higher scores indicate stronger trends with prices above rising WMAs. Lower scores indicate weaker trends with prices below declining WMAs. Longer WMAs are more heavily weighted.
Trend Score vs. SPX: Applies the same methodology as the Trend Score but uses the ratio of the ETF versus to the S&P 500 Index to determine relative performance.
Long-term Trend Score: Ranges from -20 to +20 and includes the 13-, 26-, 40-, and 200-WMAs. Higher scores reflect stronger long-term uptrends, while lower scores indicate long-term downtrends. Longer WMAs carry more weight.
Long-term Trend Score vs. SPX: Applies the Trend Score LT methodology to the relative price ratio of the ETF compared to the S&P 500.

Broad-based sector breadth and leadership month-to-date in December

Chart 1: December month-to-date sector ETF and SPX price returns as of 12/12/2025

Source: Optuma, Suttmeier Technical Strategies

S&P 500 GICS Level 1: Sector ETF Summary

Top Five Tactical Sector Ranks: XLV, XLK, XLY, XLC, and XLF

The Top Five Tactical Sector Ranks: Healthcare (XLV), Technology (XLK), Discretionary (XLY), Communication Services (XLC), and Financials (XLF). XLF replaces Energy (XLE) in the top five. Only XLK, XLC, and XLF also appear in the top five of the 52-week Ranks. XLY and XLF reached weekly closing basis 52-week highs last week.

Bottom Five Tactical Sector Ranks: XLRE, XLU, XLP, XLB, and XLE

The Bottom Five Tactical Sector Ranks: Real Estate (XLRE), Utilities (XLU), Consumer Staples (XLP), Materials (XLB), and Energy (XLE). XLE replaces Financials in the bottom five. Four of these – XLRE, XLP, XLB, XLE – also rank in the bottom five of the 52-week Ranks.

Tactical Ranks

· Top Five: Healthcare, Technology, Discretionary, Communication Services, and Financials

· Bottom Five: Real Estate, Utilities, Staples, Materials, and Energy

52-week Ranks

· Top Five: Technology, Communication Services, Industrials, Financials, and Utilities

· Bottom Five: Real Estate, Staples, Materials, Energy, and Discretionary

Trend Scores

· Bullish absolute and vs. SPX: Technology

· Bearish absolute and vs. SPX: Staples and Real Estate

· Bullish absolute but negative relative scores: XLY, XLC, XLF, XLI, XLE, XLB, and XLU

· Zero relative scores: Healthcare

Long-term Trend Scores (LT Trend Score)

· Bullish absolute and vs. SPX: Technology and Communication Services

· Bearish absolute and vs. SPX: Real Estate

· Bullish absolute but negative relative scores: XLV, XLY, XLF, XLE, XLB, XLP, and XLU

· Zero relative score: Industrials

Table 1: S&P 500 GICS Level 1 Sector ETF Trend Ranks and Scores as of 12/12/2025: Sorted by Tactical Rank

Source: Optuma, Suttmeier Technical Strategies

Sector ETF Trend Scores for the last 10 weeks

· Strongest: XLC, XLY, XLE, XLV, XLI, and XLK (maximum positive) followed by XLF and XLB

· Weakest: XLRE and XLP

· Positive over last 10 weeks: XLC, XLY, XLF, XLI, XLK, and XLU

· Negative over the last 10 weeks: XLP

· Improved last four weeks vs. prior four weeks: XLP, XLE, XLV, and XLB

· Deteriorated last four weeks vs. prior four weeks: XLU and XLRE (big drop to maximum negative last week)

Table 2: Sector ETF Trend Scores for the last 10 weeks

Source: Optuma, Suttmeier Technical Strategies

Sector ETF Trend Scores vs. the S&P 500 for the last 10 weeks

· Strongest: XLK but a downtick from maximum positive

· Weakest: XLP and XLRE

· Upticks from maximum negative: XLY, XLF, and XLB

· Positive over last 10 weeks: Only XLK

· Negative over the last 10 weeks: XLY, XLP, XLE, XLF, XLB, and XLRE

· Improved last four weeks vs. prior four weeks: XLV

· Deteriorated last four weeks vs. prior four weeks: XLC, XLY (but improved last week), XLK, and XLU

Table 3: Sector ETF Trend Scores relative to the S&P 500 for the last 10 weeks

Source: Optuma, Suttmeier Technical Strategies

Sector ETF Long-term Trend Score for the last 10 weeks

· Strongest: XLC, XLY, XLE, XLV, XLI, and XLK (maximum positive) followed by XLF and XLU

· Weakest: XLRE followed by XLP

· Positive over last 10 weeks: XLC, XLY, XLE, XLF, XLV, XLI, XLB, XLK, and XLU

· Negative over the last 10 weeks: None

· Improved last four weeks vs. prior four weeks: XLE, XLV, and XLB

· Deteriorated last four weeks vs. prior four weeks: XLU

Table 4: Sector ETF Long-term Trend Scores for the last 10 weeks

Source: Optuma, Suttmeier Technical Strategies

Sector ETF Trend Long-term Scores vs. the S&P 500 for the last 10 weeks

· Strongest: XLK followed by XLC – the only positive sectors

· Weakest: XLP and XLRE (all maximum negative)

· Upticks from maximum negative: XLY, XLF, and XLB

· Positive over the last 10 weeks: XLC and XLK

· Negative over the last 10 weeks: XLY, XLP, XLE, XLF, XLV, XLB, XLRE, and XLU

· Improved last four weeks vs. prior four weeks: XLV

· Deteriorated last four weeks vs. prior four weeks: XLC and XLK

Table 5: Sector ETF Long-term Trend Scores relative to the S&P 500 for the last 10 weeks

Source: Optuma, Suttmeier Technical Strategies

Relative rotation graph (RRG)

What is the RRG?

The Relative Rotation Graph (RRG) highlights sector leadership and rotation by plotting relative strength (x-axis) against relative momentum (y-axis) versus a benchmark. This creates four quadrants: Leading (upper right – positive relative strength and relative momentum), Weakening (lower right – positive relative strength and negative relative momentum), Lagging (lower left – negative relative strength and relative momentum), and Improving (upper left – negative relative strength and positive relative momentum). This framework shows the rotation of sectors through different phases of relative performance. Sectors tend to move in the clockwise direction, often crossing through all four quadrants.

Bullish RRG rotation: XLY, XLI, XLE, XLF, XLB, and XLP; XLC gained momentum

The sectors with a positive, up-and-to-the-right heading—indicating improving relative momentum and relative strength—are XLY, XLI, XLE, XLF, XLB, and XLP. XLF is positioned to rotate into Improving from Lagging. XLE and XLP are in improving, and XLY, XLI, XLF, and XLB are in Lagging. XLC showed improved relative momentum in the Lagging quadrant of the RRG last week.

Bearish RRG rotation: XLK and XLU; XLV and XLRE lost momentum

Sectors with a negative, down-and-to-the-left heading—signaling deteriorating relative momentum and relative strength—XLK and XLU. XLK remains in Weakening after failing to rotate back into Leading in mid to late November, XLU stalled in Improving after failing to rotate into Leading early December. XLV is the only sector in Leading but lost relative momentum last week. XLRE saw a slight deterioration in momentum last week in the Lagging quadrant.

Chart 2: Relative rotation graph (RRG) for the S&P 500 sector ETFs

Source: Optuma, Suttmeier Technical Strategies

Sector and group ETFs on the move

Financials (XLF): Breakout and retest with upside potential to 61.25

Chart 3: SPDR Financials Select Sector Fund ETF (XLF) and relative to the S&P 500 (bottom)

Source: Optuma, Suttmeier Technical Strategies

Regional Banks (KRE): Bullish cup and handle breakout watch

Chart notes

· See our latest Tech Speak 101 for more on Fibonacci retracement levels.

· KRE is forming a potential bottom relative to the SPX from its 2023-, 2024, and 2025 lows. Sustaining last week’s close above the 13-, 26-, and 40-WMAs vs. the SPX would bode well for this pattern, but a decisive breakout above the late 2023-late 2024 highs and declining 200-WMA is required to confirm this bottom and suggest enduring leadership for KRE relative to the SPX.

· The 100% extension at 77.45 is the rally from the cup low to the handle high projected from the handle low.

· The 100% extension at 82.79 is the rally from the May 2023 low to the November 2024 high projected from the April 2025 low.

Chart 4: SPDR S&P Regional Banking ETF (KRE) and relative to the S&P 500 (bottom)

Source: Optuma, Suttmeier Technical Strategies

Industrials (XLI): Defends support to refocus upside potential toward 176

Chart notes

· XLI continues to trade within a potential bottoming pattern vs. the SPX

Chart 5: SPDR Industrials Select Sector Fund ETF (XLI) and relative to the S&P 500 (bottom)

Source: Optuma, Suttmeier Technical Strategies

Agribusiness ETF (MOO): H&S bottom breakout watch

Chart 6: VanEck Agribusiness ETF (MOO): Weekly chart

Source: Optuma, Suttmeier Technical Strategies

S&P 500 GICs 1 “cyclical” sector ETF charts

Financials: New absolute price high on a relative uptick vs. the SPX

Financials (XLF) remain in a positive absolute trend, supported by rising 26- and 40-WMAs and the late-June breakout from a bullish consolidation. The sector reached a new absolute price high last week as trend scores vs. the SPX up-ticked from maximum negative levels. Defending absolute price support on bullish rotation vs. the SPX suggests a breakout and retest pattern that favors more upside for XLF.

Chart 7: Financials (XLF) and XLF vs. SPX (top), Trend Scores (center), and Long-term Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Industrials: New absolute price high on a relative uptick vs. the SPX

The Industrials sector (XLI) reached a new record high last week on maximum positive absolute trend scores. Scores remain lackluster vs. the SPX but have up-ticked in December to maintain the potential for a mid 2023 to late 2025 bottoming pattern versus the SPX (Sep 22 The Sector Edge). In summary, XLI is positioned for absolute upside, but sustained leadership from this cyclical sector remains elusive.

Chart 8: Industrials (XLI) and XLI vs. SPX (top), Trend Scores (center), and Long-term Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Materials: Stabilizes on positive shift in absolute price trend scores

Materials (XLB) defended its rising 200-week moving average and stabilized on a positive shift in its absolute price trend scores to invalidate the risk of a tactical double top (Nov 3 and Oct 20 The Sector Edge). The sector also up-ticked from maximum bearish relative trend scores, continuing its improvement after reaching a multi-year relative low vs. the SPX in late October. However, XLB remains below declining 26- and 40-WMAs and a long-term downtrend line relative to the SPX, which is a risky relative price setup (Sep 2 The Sector Edge).

Chart 9: Materials (XLB) and XLB vs. SPX (top), Trend Scores (center), and Long-term Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Energy: Stabilizes on both an absolute and relative price basis

Energy (XLE) has stabilized within a choppy absolute price uptrend from the April low after holding important support (Nov 21 and Oct 20 The Sector Edge). A shift to maximum positive absolute trend scores confirms this improvement and increases the potential for a bullish breakout for this cyclical sector. XLE has improved from mid and late October lows vs. the SPX, but it would take a decisive rally above the declining 26- and 40-WMAs and a long-term downtrend line vs. the SPX to suggest more enduring leadership for Energy.

Chart 10: Energy (XLE) and XLE vs. SPX (top), Trend Scores (center), and Long-term Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

S&P 500 GICs 1 “growth” sector ETF charts

Technology: Tactical dip within bullish absolute and relative trends

Technology (XLK) has dipped within bullish absolute and relative price trends. Continued closes above the rising 13-week moving average (WMA) would keep absolute trend scores at maximum positive levels. XLK retested its September breakout point and rising 26-WMA relative to the SPX but must sustain this tactical improvement on both an absolute and relative basis to overcome its early November weekly upside exhaustion gap and bearish engulfing pattern (Dec 1 and Nov 10 The Sector Edge).

Chart 11: Technology (XLK) and XLK vs. SPX (top), Trend Scores (center), and Long-term Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Discretionary: Defends absolute price uptrend but needs help vs. the SPX

Discretionary (XLY) defends its bullish absolute price trend (rising 26- and 40-week moving averages) within what could be a bullish cup and handle pattern on a shift back to maximum positive absolute price trend scores (Dec 1 The Sector Edge). Even in the face of negative relative trend scores, XLY continues to build a potential late 2022–late 2025 head and shoulders bottom vs. the SPX but must regain its 40- and 200-week relative price moving averages for any confidence in this developing bottom (Oct 6 The Sector Edge).

Charts 12: Discretionary (XLY) and XLY vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Comm Services: Absolute trend scores maximum positive on a bull flag breakout

The Communication Services (XLC) sector has maximum positive absolute trend scores. XLC broke higher from a bullish flag in early December to confirm a “buy the dip” pattern (Dec 8, Dec 1 and Nov 10 The Sector Edge). Although XLC recently shifted to a negative Trend Score vs. the SPX, XLC’s relative 200-week moving average has begun to rise, which has underpinned the sector’s Long-term Trend Score vs. the SPX at a positive level.

Chart 13: Comm Services (XLC) and XLC vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

S&P 500 GICs 1 “defensive” sector ETF charts

Utilities: Breaks support vs. SPX as sector dips within an absolute price uptrend

The Utilities sector (XLU) continues to pull back on an absolute price basis as absolute trend scores deteriorate from maximum positive levels, relative trend scores deteriorate within negative territory, and XLU breaks support vs. SPX on a 13-week relative low breaks. XLU’s pullback shows chart, uptrend, and weekly moving average support, but the sector looks quite vulnerable vs. the SPX.

Chart 14: Utilities (XLU) and XLU vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Staples: Continues to struggle within a long-term lagging trend

The setup for Staples (XLP) remains challenged with maximum bearish relative trend scores vs. the SPX, but what’s challenging for Staples is bullish for the broader equity market (Sep 2 The Sector Edge). The long-term lagging trend remains firmly in place with continued multi-year relative lows into late October prior to an uptick. XLP continues to defend important absolute chart support and the rising 200-week moving average (Nov 3 The Sector Edge), even in the face of this long-term lagging trend vs. the SPX.

Chart 15: Staples (XLP) and XLP vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Real Estate: A continued struggle on negative absolute and relative scores

We continue to monitor a potential base-building process for Real Estate (XLRE) from mid 2022 (Oct 20 and Sep 29 The Sector Edge) but need a sustained improvement in absolute and relative trend scores for any confidence in this pattern. This improvement is not happening. XLRE’s Trend Score hit maximum negative last week with the Long-term Trend Score dropping to -12. Trend scores vs. the SPX remain at maximum negative levels with XLRE reaching a multi-year relative low in early December.

Chart 16: Real Estate (XLRE) and XLRE vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Healthcare: Bullish rotation, positive absolute trend, and a double bottom vs. SPX

The bulls made a stand, triggering a rally out of a tactical base (Oct 6 The Sector Edge) that invalidated the early 2024-early 2025 head and shoulders (H&S) top, which is a bullish setup. Absolute trend scores have shifted to maximum positive levels to confirm this bullish shift. Given the retest of the old highs from late 2024, we are not ruling out a consolidation phase for XLV that could provide a better entry point for new longs (Dec 1 The Sector Edge). Trend scores relative to the SPX up-ticked from maximum bearish levels to confirm a relative a double bottom. The next step for XLV is clearing chart resistance and the late 2022 downtrend line vs. the SPX.

Chart 17: Healthcare (XLV) and XLV vs. SPX (top), Trend Scores (center), and LT Trend Scores (bottom)

Source: Optuma, Suttmeier Technical Strategies

Suttmeier Technical Strategies, LLC (STS) provides financial commentary and market analysis for educational and informational purposes only. We are not registered investment advisors, and nothing published by STS should be considered personalized investment advice, a recommendation to buy or sell any security, or a solicitation to engage in investment activity. All content is impersonal and does not consider your individual financial circumstances. Past performance is not indicative of future results. Investing involves risk, and you should consult with a licensed financial advisor before making any investment decisions. STS or its representatives may hold positions in securities mentioned in our publications. Such holdings are subject to change without notice and do not constitute investment advice.

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