Staples and Healthcare Stumble: Eight Sectors Still Overbought

Includes: DIA, FXG, IPS, QQQ, SPY
by: Bespoke Investment Group

Although the S&P 500 is essentially unchanged since Tuesday when we highlighted the fact that all ten S&P 500 sectors were overbought, two sectors have seen minor stumbles and moved into neutral territory. As shown in the chart to the right (see Tuesday's post for an explanation), Consumer Staples and Healthcare have both moved from overbought levels two days ago to neutral territory today. It is typically a red flag when the market is rising and there is less participation within individual sectors/stocks. However, given the fact that the declines in Health Care and Consumer Staples have been minor, and both sectors have been anything but leaders (see relative strength charts below), the bulls are likely to ignore this divergence...for now. (Click to enlarge)

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