US equity futures are pointed slightly lower once again this morning, and after a week or so of declines, we thought it was a good time to update our S&P 500 sector trading range charts. In the charts below, the white line represents each sector’s 50-day moving average, while the light blue shading represents its “normal” trading range, which is between one standard deviation above and below the 50-day. Moves into the red or green zones are considered “overbought” or “oversold.” The red zone is between one and two standard deviations above the 50-day, while the green zone is between one and two standard deviations below the 50-day.
As shown below, the recent pullback is barely but a blip on the one year chart of the S&P 500. The index remains in a very strong uptrend channel, and it could fall quite significantly and still be trading within its uptrend.
Below is a look at our individual sector trading range charts. Sectors like Financials, Consumer Discretionary, Industrials, Technology, and Materials all look solid still, but a few other sectors have run into some technical problems. Consumer Staples, Health Care, and Utilities all had nice runs up until their recent highs, but all three sectors stalled without being able to take out their highs from mid-2016. Finally, the Energy sector has been the main area of weakness for the market in 2017, and it’s 2.5%+ drop yesterday leaves it right at key support that we’ve drawn on the chart. We’ll see if it can hold support or not in today’s trading.
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