Playing defense

Defensive Stocks are defined as stocks in sectors that remain constant during a downturn.  Examples of these sector are health care, utilities and oil.  During the market's rally these sectors were down from 20% to 17% compared to the SPX.

While the market has continued to rally traditional defensive sectors have started to rally as well.  The last 3 days, these sectors have outperformed the SPX. 

This could be indicating a rotation of money into the more defensive sectors as the market has become over extended.  The charts of these sectors are showing a break out as well on strength.

XLU- has broken out of it consolidation/ bull flag.  I mentioned to watch the XLU breakout earlier.

XLV- Also has broken out and is starting a new uptrend

Watching these sectors will be a good indication is the new rally is losing steam, since money is moving into these that are defensive.