Whenever the market enters a corrective wave, regardless of the magnitude and time, section rotation comes into play.

While we haven't seen any signs of defensive rotation yet, there's movement beneath the surface worth paying attention to.

The chart of the equal-weighted S&P 500 $RSP relative to the market-cap-weighted S&P 500 $SPY can provide valuable insights. 

It gives us a read on future leadership trends and helps guide how we position ourselves in various vehicles and themes.

The market’s been a hot mess this past month. Failed breakouts are piling up, with prices slipping back into their ranges and falling below key overhead supply zones.

Beneath the surface, the average drawdown for S&P 500 stocks stands at 18.2%, and the weakness is spreading across major sectors and industry group indexes.

It began with lagging areas like metals and mining, which have already rolled over, and now, groups such as banks are breaking below their prior cycle highs.

Let’s break down the choppy action and highlight the struggles across various groups to hold their breakouts.

Let’s start with the Equal-Weight Consumer Discretionary $RSPD:

The market of stocks has been a chop fest for the past month, prompting me to keep a close eye on market internals.

While trends in the major indexes remain unaffected, short-term weakness has been steadily creeping in beneath the surface.

The average 52-week drawdown of S&P 500 stocks has reached -18.2%. This means the average stock is experiencing its sharpest decline in over a year.