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Defense is on The Field
The NFL Draft is next week, one week closer to the best sport on Earth: FOOTBALL.
It’s not the fastest game, but if you understand the nuance?
It’s a beautifully violent game of chess.
Each player have a specific assignment that has to be ran in unison with the other 10 on the field at the same time in order to be successful. The ultimate team sport.
But it’s also very simple….score more points that the other team.
One stat teams obsess over to do that?
Time of possession - the amount of time your offense has the ball.
Because if your offense isn’t on the field?
You’re probably not scoring points.
The $SPY ( ▲ 0.14% ) S&P 500 is no different.
Price is it’s scoreboard, but if we dig a level deeper we can evaluate who’s actually on the field, offense or defense.
And that changes everything about how we call plays.
Let’s break it down.
The S&P 500 is made up of 11 sectors and the 500 stocks are categorized accordingly.
$XLK ( ▼ 0.54% ) - Technology
$XLF ( ▲ 0.26% ) - Financials
$XLV ( ▼ 0.59% ) - Health Care
$XLY ( ▲ 0.63% ) - Consumer Discretionary
$XLC ( ▲ 0.65% ) - Communication Services
$XLI ( ▲ 0.55% ) - Industrials
$XLP ( ▲ 2.13% ) - Consumer Staples
$XLE ( ▲ 2.26% ) - Energy
$XLU ( ▲ 1.03% ) - Utilities
$XLRE ( ▲ 1.58% ) - Real Estate
$XLB ( ▲ 0.69% ) - Materials
From there, we can split them into their squads:
Offense: “TV, Tech, Travel and Tools”
When you think of offense for the stock market its Discretionary, Technology, Financials, Industrials, and Communication Services.
These sectors thrive when the economy is booming and confidence is high.
They’re fast, flashy, and built to score.
When they’re leading?
That’s when we call our best plays. Take shots. Rack up points.
Defense: “Staples, Scripts, and Sockets”
These guys don’t care if it’s raining or the crowd’s booing.
People still eat, take their meds, and keep the lights on.
When they’re leading the game, it’s a sign to be doing damage control and managing risk until we can get the offense back out there.
So who’s on the field right now?
Look at recent sector performance both Year-to-Date and over the past month it’s not even close.
Defense is out there.
This isn’t the time to be running trick plays or launching deep balls.
It’s about controlling risk, managing field position, and protecting capital.
Defense might not score all the points but calling great defensive plays can win you championships.
Cheers,
Larry Thompson, CMT CPA