Below is a table showing the trading ranges for the S&P 500 and its ten sectors. Ā For each sector, the black dot shows where it's currently trading, while the end of the tail shows where it was a week ago at this time.
As shown, after trading in overbought territory one week ago, the S&P 500 is now only slightly above oversold territory. Ā The last time it touched oversold levels a couple weeks ago, the index bounced nicely. Ā Will the same happen again this time?
Four sectors are now oversold, while two are overbought. Ā Materials is the most oversold at two standard deviations below its 50-day, while Energy, Industrials and Technology aren't far behind. Ā Unfortunately, the only two sectors that are overbought are Telecom and Utilities -- two extremely defensive sectors. Ā The one positive is that the two Consumer sectors are still trading above their 50-days. Ā With many of the retailers reporting earnings over the next couple of weeks, consumer stocks will now take the spotlight. Ā Will they be able to weather the earnings storm, or will they be the next to go?
