Bespoke's Sector Snapshot (7/25/08)

Below we highlight our trading range charts of the S&P 500 and its ten sectors.  The green (red) shading represents between one and two standard deviations below (above) the sector's 50-day moving average.  When prices move into or below the green area, they are considered oversold, and vice versa for the red zone. 

As shown in the first chart below, the S&P 500 barely made it out of oversold territory during its recent rally of 5%.  After yesterday's declines, the index is now in the green zone once again.  And even after the Financial sector recently had its biggest 5-day rally in 20 years, it didn't even make it above its 50-day moving average.  After it failed to move above the 50-day yesterday, the technicals don't look good for Financials. 

Energy, Materials and Utilities -- three market bastions for the first part of this bear market -- are now the most oversold of the ten S&P 500 sectors.  As energy and other commodities have sold off, they have unsurprisingly brought the stocks down with them.  While investors have been waiting on a pullback in oil to get back into stocks, the gains in the major indices might be muted since energy stocks make up such a big slice of the pie now.

click to enlarge

Comments

[Alan vonAltendorf]

Nice work, guys. Thank you.