The S&P 500 has settled in lately at this lower level around the 1,900-1,950 range. Below is our trading range chart for the index. The white line represents its 50-day moving average, while the blue shading represents its “normal” trading range — one standard deviation above and below its 50-day moving average. The green shading represents oversold territory, or between one and two standard deviations below the 50-day. After getting more than 4 standard deviations below its 50-day, the index’s trading range has widened rapidly. And this widening has caused the index to become “less oversold” even though the price hasn’t increased dramatically.
With the S&P as a whole still well below its 50-day, it’s not surprising that just 15.6% of its index members are above their 50-days. Below is a look at where breadth levels stand for the ten S&P 500 sectors. As shown, the best reading of any sector is just 26.1% for Technology. The Financial sector currently has the worst reading with just 3.4% of stocks above their 50-days. Even Energy is stronger than that at 15%.