Below is a look at our trading range chart for the S&P 500. The white line in the chart represents the index’s 50-day moving average, while the light blue shading represents its normal trading range (one standard deviation above and below the 50-DMA). Moves into the red zone are considered overbought, while moves into the green zone are considered oversold.
After its tight sideways range completely broke down in August, the index has recently surged 9%+ off its lows, and today’s rally leaves it back in overbought territory for the first time in months. Today’s move also left the index back above the bottom end of the sideways range it was in prior to the August swoon. See more chart analysis in today’s Sector Snapshot available to Bespoke Premium and Bespoke Institutional members. See a sample here or see today’s with a free trial.
Below we highlight sector breadth levels as measured by the percentage of stocks trading above their 50-day moving averages. As shown, 71.6% of stocks in the S&P are above their 50-days, and six sectors have readings better than this. The top three sectors are Telecom, Utilities and Consumer Staples — all defensives — and then Technology ranks fourth at 88.2%.
One sector sticks out like a sore thumb and that’s Health Care. Prior to the August sell-off, Health Care had been a market darling for two years, but the tide has turned very quickly for this area of the market.
Overall, breadth levels are looking a lot better recently, which is a healthy sign for the market. Start a Premium trial for an even closer look at today’s market internals.