In the past week, stocks managed to reach all-time highs, but in the past couple of days have seen declines leading to a slight pullback in overbought levels. Earlier in the week, there had been as many as four extremely overbought major index ETFs, and today there are not any. On the other end of the spectrum, both the Core S&P Small Cap (IJR) and Russell 2000 (IWM) had been oversold earlier this week before moving back to neutral levels.
Performance over the past week have been somewhat positive with all but the Core S&P Small Cap (IJR) rallying. Meanwhile, the Nasdaq (QQQ) has handily outperformed rising over 1.5%.
Start a two-week free trial to Bespoke Premium to access our Trend Analyzer and much more.
Turning to the individual sectors, conditions are a tad less overbought than the major indices. Currently, five of the sectors are overbought with only Communication Services (XLC) sitting at extreme levels on the back of a 2.52% gain over the past week. Another five are neutral, and the Health Care Sector (XLV) is still oversold. While it is still oversold, XLV is looking much better than it has in the past couple of weeks. After heavy selling brought the sector well more than 2 standard deviations below the 50-DMA, the sector has rallied 2.74% in the past week (the best of the sectors) and is much less oversold.