If momentum is the strategy du jour, then an end of rally blow-out in the large cap space is likely to come from Materials, IT and Consumer Discretionary. But with those sectors already up 32%, 36% and 20% YTD respectively, there is a chance we won't get much more juice out of them, and it'll be left to some of the laggards to equalize this turn. Prime candidates are Industrials, Telecom, Healthcare, and Energy (2.75%, -5.03%, 3.98%, and 1.9% YTD respectively).
What is interesting is that when you drill down into the small and mid cap space, you get slightly different sectoral leaders and laggers. Leading sectors in the mid cap space have been Energy (43%), Consumer Discretionary (36%), IT (35%), and Materials (31%). Laggards have been Telecom (-5.9%), Financials (-0.11%), and Utilities (3.09%). In the small cap space, leading sectors have been Consumer Discretionary (37%), IT (33%), Energy (28%) and Materials (26%). Lagging sectors have been Utilities (-6.17%), Telecom (-40%), and Financials (-12%).
Defensive strategies have been crushed this year, while being leveraged to cyclicals would have knocked the ball out of the park.
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