Below we highlight trading range charts of the S&P 500 and its ten sectors. In the charts below, the blue shading represents between one standard deviation above and below the 50-day moving average (white line). When prices are within this blue shading, the sector is trading in neutral territory relative to its historical parameters. The green shading represents between 1 and 2 standard deviations below the 50-day moving average (vice versa for the red shading), and moves into or below this area are considered oversold.
September has not started out as a good month for stocks. The S&P 500 has moved below its 50-day moving average and back into oversold territory since the Labor Day holiday. Technology, Energy, Utilities and Materials have cratered the most, all moving well into or even below the green zone. Health Care and both Consumer sectors remain closer to overbought territory than oversold, and surprisingly, the chart of the Financial sector looks better than most of the others.
Courtesy: Bespoke Investment Group