Market analysis · United States

WPI™: the US sector map, 12 August 2026

Eight of eleven sectors sit in the strong quadrant, only one is climbing back, and utilities are alone at the bottom. But the detail that matters is not who leads — it is where the arrows are turning, and what happens when three different tools point at the same price.

Data as of the close of Tuesday, 11 August 2026 · Screenshots captured 12 August 2026 from the DOMINA platform · 7-minute read

MARKET ANALYSIS · UNITED STATES

Eight of eleven sectors sit in the strong quadrant, only one is climbing back, and utilities are alone at the bottom. But the detail that matters is not who leads — it is where the arrows are turning.

Data as of the close of Tuesday, 11 August 2026 · Screenshots captured 12 August 2026 · 7-minute read

The US market before the sectors: paying up for optimism

Before the sectors, the context. The platform's composite risk gauge reads 77 out of 100 — extreme greed territory — with the cycle phase classified as expansion. The VIX sits at 15.3 against a 200-day average of 18.6, the term structure is in contango, and the put/call ratio is 0.77 versus a 20-day average of 0.83. The S&P 500 closes at 770.56 on SPY, 9.5% above its own 200-day moving average.

Participation is holding up: 71.1% of index constituents (356 of 501) trade above their 200-day average, 64.7% above the 50-day. In the latest session, 274 stocks advanced against 226 declining, with 48 new 12-month highs against 8 new lows. This is not a market that is falling apart. It is a market where the risk sits in the price of optimism, not in a lack of buyers.

Against that backdrop, the useful question is not whether the market goes up or down. It is who is leading, who is losing steam, and who is coming back in through the side door. That is exactly what the WPI™ puts into a single picture.

How to read the map

The WPI™ — Wyckoff Position Index™ measures two momentums for every instrument: a long one on the horizontal axis and a short one on the vertical. That produces four quadrants and, more importantly, a path: the tail behind each label traces the recent sessions, and the arrowhead shows where it is heading.

One thing sets it apart from the rotation maps it resembles: the calculation is absolute. Each instrument is measured against itself, not against an index. The benchmark — SPY here — is not the yardstick: it is simply another point on the map. Relative strength still shows, but as a consequence: since every instrument sits on the same plane, it is their position relative to each other that says it.

The four quadrants. Top right, STRONG: both momentums positive. Top left, IMPROVING: the long one is still negative, the short one has already turned up. Bottom right, WEAKENING: the long one still holds, the short one has given way. Bottom left, WEAK: both negative. The natural rotation runs clockwise: Improving → Strong → Weakening → Weak. A sector entering Weakening is not weak yet — it is simply no longer the best.

Two things stand out. First, most of the market is clustered around SPY in the right half — strength is broad rather than concentrated, consistent with 71% of stocks above their long-term average. Second, XLE, energy, is the highest point on the map, and its tail is the longest of the group. It got there from far away, and fast.

The numbers behind the positions

The map is a summary. These are the returns that produce it, calculated on closing prices for 11 August 2026.

Comparing the 3-month and year-to-date columns explains the map better than any commentary. Health care is up 8% since January, behind the market, but 15.6% over the past three months — more than double the index. It is a sector that has been making up ground quickly, which is why it still points upward inside the strong quadrant. Communication services do the opposite: last year-to-date, recovering only now — the sole occupant of the Improving quadrant.

Health care: the recovery you can see on the chart

Breadth confirms it from the inside: 87% of health care stocks trade above their 200-day average and 85% above the 50-day — the highest reading in the entire index on both measures. This is not a sector carried by three names: almost all of it is moving together.

The rectangles: where price builds the position

The rectangles are not chart decoration, and they are not support lines drawn by hand. They are the output of the Range Detector, our sideways-phase indicator, and they are Wyckoff's idea written in code: movement is not born of movement, it is born of the pause. Inside a sideways phase, someone is building a position against someone who is giving it up — or the other way round. When the building is done, price leaves. The direction of the exit is the consequence; the rectangle is the cause.

That is why the chart does not show one rectangle but the whole chain of pauses. Each pause is a chapter, and the sequence tells you whether the instrument is stepping up one level at a time or turning on itself.

How to read them. Colour is state: orange = the range is still open, price is inside; teal = closed to the upside; red = closed to the downside. Border weight is the timescale it was born on — the thicker it is, the longer the process and the more the band matters. The engine looks for sideways phases across every timescale, from daily to yearly, and on any given chart it draws only those with enough bars at that scale to be a real process rather than an accident. Each band also carries a density score: how genuinely full of trading the phase was, rather than crossed at speed. Empty bands are discarded before they reach the screen.

On health care, the rectangle that matters opened on 29 June and closed on 5 August, between 157.98 and 164.27, with a density of 0.69: five weeks of building inside a band less than four percent wide. Price today is 168.01 — outside and above. And above that rectangle another one has already formed, still open, between 160.73 and 168.53: the next step, the one being built right now.

One piece of vocabulary that matters later: when price leaves the band and comes straight back in, the engine does not record a break but a shakeout — Wyckoff's spring, the false move that flushes out whoever placed a stop just outside. It is the second exit on the same side that counts as a real break. On health care there were none: the band was left on the first attempt, to the upside.

Option walls: where price meets mechanical friction

The column of horizontal bars on the right of the chart is the other half of the story, and it comes from an entirely different world: not from prices, but from the option contracts open on that instrument.

The mechanism, without formulas: whoever sells options has to hedge, and hedging forces them to buy when price falls and sell when it rises. As long as the aggregate position carries a given sign, the market has a friction that shrinks its swings. At the levels where contracts pile up, that friction peaks: those are the walls. Below a certain threshold — the flip point — the effect reverses, and the same hedging that damped the moves starts amplifying them.

On the health care sector, as measured on 12 August:

Total exposure runs to 90.8 million dollars per 1% move, with the sign that dampens. The flip point sits at 157.60. At-the-money implied volatility is 10.0%, and the expected range for the session is ±0.63% — between 166.95 and 169.07. The number that decays on its own is time decay: -6.7 million a day, which is how much of that friction evaporates with every day that passes as expiries approach.

When two independent tools point at the same price

This is why it is worth keeping them on the same chart. Line up the four numbers:

One indicator looked only at the candles of the past few months. The other looked only at open contracts, knowing nothing about where price had been. They identified the same band, within half a percent. That is not a forecast and it does not become one: it is cross-confirmation, which is the one thing separating a level that exists from a level that exists only in the eye of whoever drew it.

The practical reading is the one you can take straight off the chart: the 158-165 zone acted as a building area for five weeks, price left it to the upside, and the thickest wall overhead now sits at 170.

Energy: top of the class, but not all at once

Energy is the strongest sector year-to-date at +33.5%, with crude at 83.23 dollars on the continuous contract, and 86% of energy stocks above their 200-day average. On the map, however, XLE's arrowhead is already bending down and to the right: the classic signature of something that has run hard and is starting to consolidate.

This is where the sector map stops being enough, and you go one level down: inside the sector.

Those four laggards are the reminder that 'buying the sector' and 'buying the companies in the sector' are not the same trade. But the interesting group is the other one: the three coming back.

Inside energy: what an 'improving' stock actually looks like

The numerical profile of these three is identical in shape, and it shows what 'Improving' means in practice: three negative months behind them, one strong recent month. The quadrant does not reward whoever rose the most — it rewards whoever changed gear last.

And this is where the rectangles add what returns alone cannot: how far along the building each of the three is. They are three stages of the same process.

Schlumberger: the range is already closed to the upside

EQT: price has just cleared the edge

Devon Energy: still inside

Three stages, one process. Devon is still in the band, EQT is on the edge it has just cleared, Schlumberger has left it and the band is already filed as closed to the upside. The 'improving' quadrant groups them together because it looks at the two momentums; the rectangles line them up because they look at how far along the building is. That is exactly why the two tools belong on the same screen.

The bottom of the map: where the WPI™ and breadth agree

The lower half of the first image deserves its own reading, because it is where two independent measures reach the same conclusion.

Utilities, Weak quadrant. Down 4.6% in a month, 5.9% over three, barely +1% year-to-date. Inside the sector, only 35% of stocks trade above their 200-day average and just 10% above the 50-day — the worst reading in the index. Quadrant and breadth tell the same story.

Real estate, Weakening quadrant. The most instructive case: 68% of stocks are still above the 200-day average, but only 19% above the 50-day. A sector holding up over the long horizon and already giving way over the short one — two measures independent of the WPI™, describing the same imbalance as the quadrant it sits in. On price it is down 1.4% in a month against the index's +2.9%.

Communication services, Improving quadrant. Last sector year-to-date (-4.8%), with 58% of stocks above both averages. It is the only one climbing off the floor, and for now the move is young.

A note on classifications: breadth data uses the company sector taxonomy of the index, which does not match the SPDR ETF baskets line by line — 'Consumer Cyclical' and XLY, for instance, do not hold exactly the same names. The comparison works as directional confirmation, not as numerical identity.

What to take away

The US market is broad and expanding, and optimism is expensive: 77 out of 100 on the composite, VIX at 15.3. In that setting, the question that pays is not whether to stay invested, but where: the gap between the best sector (+33.5% since January) and the worst (-4.8%) is thirty-eight percentage points in a little over seven months.

The WPI™ exists to see that gap while it forms, not afterwards. Three readings stand out today: health care is where strength and breadth line up best; energy leads but is consolidating, and inside it fifteen strong names coexist with four weak ones; utilities and real estate are bleeding, with real estate already broken in the short term while still intact in the long.

Underneath the map sits the method, which is the reusable part: three tools looking at three different things. Relative strength says where to look, the rectangles say how far along the building is, the option walls say where the market meets mechanical friction. When all three converge on one price — as on health care, where the floor of the rectangle and the options flip point sit 0.2% apart — that level deserves more attention than one drawn by hand. When they diverge, the divergence is itself the information.

And the rule the quadrants never replace: a position on the map describes the current state — it does not forecast. Today's arrow direction does not guarantee tomorrow's.

Daniele Lavecchia — editorial lead, DOMINA Trading Suite · 12 August 2026

Method and sources

WPI™ maps and charts: DOMINA platform, daily timeframe, three-session tails, captured 12 August 2026. Returns computed on closing prices of 11 August 2026 from the internal price archive, dividends included, in US dollars. Market breadth, composite risk gauge and sentiment data regenerated on 12 August 2026 at 01:07 across the 501 S&P 500 constituents. Crude oil price from the continuous WTI contract. The sideways rectangles are produced by the platform's Range Detector, queried on 12 August 2026 with default parameters: the band levels quoted in the text are those computed by the engine, not measured off the chart. Option walls come from the platform's options engine on contracts open as of 11 August 2026, measured 12 August at 02:58; exposure is expressed in dollars per 1% move in the underlying, and the sign indicates the direction of the effect on price swings. The calculation methodology behind all three indicators is proprietary and is not disclosed.

Disclaimer

This document is for information and educational purposes. The sectors and stocks mentioned are not recommendations: this is not financial advice, not personalised guidance, and not a solicitation to invest. The data describes past and present conditions and contains no forecast or promise of future results. Every investment decision remains the reader's responsibility.

Transparency about production

This article was produced with the assistance of artificial intelligence tools, under human supervision and review, in line with EU Regulation 2024/1689 (Regolamento UE 2024/1689). All figures come from the archives and calculation engines of the DOMINA platform and were verified before publication.