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The global frenzy for yield continues this morning as Mario Draghi made dovish comments suggesting more easing measures gas buddy likely to come from the ECB in response to recent weakness in the economic headlines. US Treasuries are rallying again this morning, sending the yield on the 10-year to 2.38% and pushing the yield curve further into inverted territory at negative 6 basis points on the 10y/3m curve. In corporate news, Southwest Airlines (LUV) lowered guidance citing the grounding of the 737 MAX and adverse weather conditions. On a more positive note, both KB Homes (KBH) and Lennar (LEN) are trading up over 2.5% after reporting earnings.

The chart below is from the second page of our Morning Lineup and shows where SP 500 sectors are trading with respect to their trading ranges. For each sector, the circle represents where it is now, while the tail indicates where the sector was trading a week ago. In the chart, light red or green shading represents overbought or oversold readings (1 standard deviation above or below 50-DMA), while dark red and dark green shading indicate extreme overbought or oversold readings (2 standard electricity and magnetism review game deviations above or below 50-DMA).

Looking at the chart, can you tell which one isn’t like the others? While the SP 500 and most sectors remain at short-term overbought levels, Financials have been hit hard and is not only the only sector trading below its 50-DMA, but it is also the only oversold sector. Keep in mind also, that this reading comes after yesterday’s rally where the sector handily outperformed the SP 500 gaining over 1%. If there is one sector where the pain of an inverted yield curve was immediately felt, it was in the Financials!

The road higher for gas prices has been as clear as can be of late as prices have been on a tear. According to AAA, the national average price of a gallon of gas has risen 17.3% YTD through 3/25. That’s a full seven percentage points above the average YTD gain for this time of year and the largest YTD increase through 3/25 since 2012. Even after the gains, though, the average price is only four cents higher now than it was a year ago. What’s ironic about this year’s gains in prices is that they are coming at a time when inflation is just about the last worry on anyone’s mind.

The chart below compares the change in gas prices this year to an annual composite chart of prices going back to 2005. While prices are higher this year, and the move has been much larger than normal, we would note that prices typically rise at this time of year. They also typically continue to rise right up until Memorial Day when the summer driving season kicks off. For most of the summer, prices then plateau and then start to rapidly decline heading into year-end.

One reason behind the much larger than gas 89 average increase in gas prices this year is that lately, prices have barely gone down- not even for a day here and there. Check out the chart below. Over the last 42 calendar days, the national average price of gasoline hasn’t declined once. Going back to 2004, there have only been two other streaks that are longer (2009 and 2011), and if prices don’t decline today or tomorrow, the current streak will move into a tie for second.

Make up your mind already! That’s the way traders are feeling towards the market these days. Whether you are a bull or bear, it’s hard not to be frustrated with how the equity market trades lately with its complete lack of decisiveness. After repeated attempts at breaking through 2,800 in the fourth quarter, the SP 500 attempted to break through that level once again in late February but stalled right at resistance. Then, in the first full week of March, it seemed as though another roll-over was in store as the SP 500 saw five straight days of declines taking the index back below its 200-DMA (light red gas engine tom shaded box in chart). Negative sentiment peaked on Friday, March 8th when the much weaker than expected Non-Farm Payrolls report set the stage for a negative open to close out the week.

The weak open on 3/8 proved to be the low point of that sell-off, and in the following week the SP 500 regained all of its prior losses and traded right back up to the former resistance line. At the close the following Friday (3/15), the SP 500 even marginally eclipsed that resistance line (provided you had a magnifying glass to see it). The strength from that week followed right through to the next week as the SP 500 looked to have finally and convincingly broken through that pesky resistance level of 2,816 (green shaded box), confirming that the ‘breakdown’ from the first week of March was a fakeout.

Or was it the rally that was the fakeout? Ever since last Wednesday’s FOMC meeting where electricity song 2015 the central bank took on a surprisingly dovish tone, equities have once again had trouble. Whether it was last Friday’s sell-off that took the SP 500 back below the former resistance line or Tuesday’s rally which has now seen its early gains more than halved, it seems as though the market can’t make up its mind one way or the other as the SP 500 sits right on the resistance line at 2,816 as we type! In the span of less than a month, we have seen two moves (one up and one down) that technicals suggested was the start of a move, and both proved to be false alarms electricity vs gas heating costs.

Since a number of the stocks involved in the sector re-classifications were mega-caps, the switch ended up altering sector weightings in the SP 500 quite a bit. Both Alphabet (GOOGL) and Facebook (FB) came out of the Technology sector and went into the Communication Services sector, which lowered the Tech sector’s market cap by $1.3 billion at the time. Other stocks like Disney (DIS), Netflix (NFLX), and Comcast (CMCSA) moved nearly $500 billion in market cap from the Consumer Discretionary sector to the Communication Services sector.

The sector re-classifications last September came at a time when the Tech sector’s weighting in the SP 500 had ballooned up to 26% of the index. Not since the Dot Com bubble of the late 90s had Tech’s weighting been that high, so the timing of last year’s sector moves was very convenient. The re-classifications basically clipped 5 percentage points off of Tech’s weighting in the SP, which made things look a lot less lopsided.

So what would the Tech sector’s weighting look like now if the sector re-classifications had not taken place last September? We answer that question in the chart below. Had the re-classifications not taken place gas monkey monster truck body, Tech would currently make up 26.53% of the SP 500. That would be a new high for the current expansion. And the only time Tech’s weighting has been higher than this level was during a 10-month window between December 1999 and October 2000. That turned out to be quite a disastrous time to be long Tech.

Health Care ranks second with a weighting of 14.56%, followed by Financials at 12.64%. Communication Services ranks 4th at 10.24%, and then Consumer Discretionary, Industrials, and Consumer Staples rank 5th through 7th. Energy, Utilities, Real Estate, and Materials combine for a weighting of about 14.5%, which is the same size as the Health Care sector on its own.