The chart below shows where the S&P 500 and each of its 10 sectors are trading relative to their 50-day moving averages. The black circle represents where the sector closed today (9/28), while the line indicates where it was one week ago. When the circle is in the white area it indicates that the S&P 500 or sector is currently trading within one standard deviation of its 50-day moving average. Readings in the lighter shaded areas indicate that the S&P 500 or sector is trading between one and two standard deviations above or below its 50-day moving average, while readings in the darker shaded areas indicate ‘extreme’ levels of more than two standard deviations above or below its 50-day.
After a 2.5% sell-off in the S&P 500 today, the Consumer Discretionary, Consumer Staples, and Technology sectors all moved back into oversold territory, leaving Utilities as the only sector that’s still neutral. As things currently stand, Health Care — which has been pulled down by weakness in the biotech group — and Materials are now in extreme oversold territory, but with another day like today, these two sectors will suddenly find themselves with plenty of company.