After a rough day yesterday, defensive sectors continue to get sold off this morning. Below is a snapshot of where the ten S&P 500 sectors are currently trading within their normal trading ranges. In the table, the black vertical line represents the sector's 50-day moving average. The white zone represents between one standard deviation above and below the 50-day, and moves into the red or green zone are considered overbought or oversold. As shown, Utilities and Telecom are now well into oversold territory, while Consumer Staples is quickly approaching its 50-day moving average. Health Care has also now moved out of overbought territory into the neutral zone.
Investors typically move into more defensive sectors if they think the market is due for a pullback. If you have done that recently, it has done anything but pay off.
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