In the recent market carnage, a few sectors have held up better than most. I noticed that Utilities and Healthcare/Pharmaceuticals seem to be among the relative outperformers recently. This is somewhat logical given the poor economic and technical environment. Utilites have traditionally been a safe haven with a good dividend yield, and both Utilities and Healthcare are things that consumers would in all likelihood not cut back on despite pocketbook uncertainty.

KEY:
Yellow = S&P 500 Index (SPY)
Green = NASDAQ 100 Index (QQQQ)
Aqua = Utilities SPDR ETF (XLU)
Red = Pharmaceutical HOLDRs ETF (PPH)
Dark Blue = Health Care SPDR ETF (XLV)

The first chart is the 52-week Daily Percent Change comparison of these 5 securities. You can see here that Utilities and the QQQQ are the outperformers of the group over this time frame. Utilities have actually been slightly-above breakeven over the past 52 weeks.

52-Week Percent Change Chart


Daily Percent Change Chart since June 2008


The next chart is showing the recent outperformance of Utilities, Healthcare, and Pharamceuticals versus the SPY and QQQQ. The recent market downtrend began around the beginning of June 2008 - you can see that the 3 sector ETFs examined are down less than 4% at most, while the major index ETFs are down over 8%.

The last chart shows in the past 2 weeks, this outperformance by these sectors began to accelerate. June 25th does not look like any kind of significant high on the SPY and QQQQ chart, but since that time, the SPY and QQQQ are down about 5%, while the XLU, PPH, and XLV are about even.

Daily Percent Change Chart since June 25


To sum up, it appears that Utilities, Healthcare, and Drugs are among the "safest" defensive sectors in the current unrelenting downtrend. Also, the NASDAQ, which had previously been an outperformer vis-a-vis the S&P 500 Index, is joining the bear trend. In times like this for long investors, a negligible gain or loss can be a sunny alternative when compared with double-digit % losses.

Price Headley is the founder and chief analyst of BigTrends.com.