Utilities Select Sector SPDR (NYSEArca: XLU) and other defensive, dividend-paying sector ETFs were crushing the S&P 500 until mid-April.

However, the utilities ETF’s year-to-date performance edge has been completely erased so far in May.

Among the nine major S&P 500 sector ETFs, only XLU is in the red for the month with a 3.6% decline. The utilities ETF is trailing the S&P 500 by nearly 7 percentage points in May. [Sector Rotation: Defensive ETFs Lead Outflows]

Yet Investors Intelligence technical analyst says a defensive rotation may actually be commencing back into the utilities.

“With the equity markets at record highs, this new activity now questions the honesty of the general market’s breakout. The ratio of the SPDR Utilities (XLU) versus the S&P 500 is attempting to turn up from a support band drawn across from the low of November 2012,” he wrote in a newsletter Friday.

“Momentum for the indicator is turning up from oversold, from a similar level as per mid-January of this year. That point was followed by three months of outperformance by the utilities,” said Coe, adding that XLU has a yield of 3.7%.

The chart below shows the relative performance of the utilities ETF versus the S&P 500.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.