This is a one step forward, one step back kind of market. We’ve basically traded sideways all year as we approach the half-way point of 2015. After a nice bounce off of the 50-day moving average yesterday, the S&P 500 has pulled back below it today. Below is a look at our trading range screen for the S&P 500 and its ten sectors as of this afternoon. As shown, along with the S&P 500 as a whole, the Consumer Staples, Energy, Industrials, Materials and Telecom sectors are now below their 50-DMAs as well. Last week at this time the S&P 500 and three sectors were overbought, but we’ve got no overbought sectors after today’s declines.
Breadth is looking weak right now. Less than 42% of stocks in the S&P are above their 50-days, which is a poor reading compared to where the index itself is trading. Just 7% of Utilities stocks are above their 50-days, and in the Energy sector the reading is 17%. Energy had been a market leader up until recently, but it has taken a nosedive over the last few weeks.
Market bulls can hang their hats on the fact that the cyclical sectors are still holding up relatively well here. Both Tech and Health Care have breadth readings above 50%, while Financials and Consumer Discretionary are above broad market levels at least.
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