Below is an updated look at the S&P 500’s trading range chart over the last year.  After just barely making a new 52-week high in April, it has been all downhill since, with the index currently trading in extreme oversold territory at two standard deviations below its 50-day moving average.  Yesterday’s declines caused more technical damage when the index broke below its lows from a few weeks ago.  Right now the bears have control and the onus is on the bulls to break the short-term downtrend that’s in place.

The defensive areas of the market like Consumer Staples and Utilities had been holding up well up until this week, but even these non-cyclicals have started to experience significant selling.  The declines for defensives have left every single S&P 500 sector with less than 50% of its stocks above their 50-day moving averages.  As shown below, just 28% of S&P 500 stocks and 3% of those in the Energy sector are above their 50-DMAs.  The largest sector of the market — Technology — currently has a very weak reading of just 25% as well.  Start a two-week free trial to one of Bespoke’s three premium membership levels.