Below we highlight our trading range charts for the S&P 500 and its ten sectors. For each chart, the blue shading represents between one standard deviation above and below the 50-day moving average. The red shading represents between one and two standard deviations above the 50-day, and moves into or above this level are considered overbought. The green shading represents between one and two standard deviations below the 50-day, and moves into or below this level are considered oversold.
The S&P 500 has now been in overbought territory since the first trading day of 2012. It's not uncommon for the market to remain overbought for long periods of time during strong rallies, but rest assured that the index won't stay overbought forever.
Looking at sectors, Technology is by far the most overbought, followed closely by Consumer Staples, Consumer Discretionary and Telecom. Materials, Industrials and Energy have all pulled back from overbought levels recently, although they still remain at the top of their normal trading ranges. The Utilities sector is the only one currently trading below its 50-day moving average.
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