Below we provide our trading range charts for the S&P 500 and its ten sectors. The red shading represents between one and two standard deviations above the sector's 50-day moving average, and vice versa for the green shading. Moves into or above the red zone are considered overbought, while moves into or below the green zone are considered oversold.
After trading in the red zone for months, the S&P 500 and its sectors now find themselves in oversold territory. Unfortunately, most of the strong uptrend lines that had been in place since the March lows have now been broken, so it's going to take another prolonged move higher to restore those uptrends. For now, the bulls will just be happy with an oversold bounce that moves things back into neutral territory.
click to enlarge