Below we provide our six-month trading range charts for the S&P 500 and its ten sectors. For each chart, the red zone represents between one and two standard deviations above the 50-day moving average, and vice versa for the green zone. Throughout the entire bull market, the S&P has been moving in an upward sloping trend channel, bouncing from its 50-DMA to the top of its red zone. As shown below, the S&P 500 is currently trading close to extreme overbought territory, but it's not quite at the level that would suggest an immediate reversal.
On the most recent rally to new highs, the defensive sectors (Health Care, Utilities, Telecom, and Consumer Staples) have traded flat to down, while the cyclical sectors have picked back up. Energy and Materials have really moved up and are now trading at the very top of their ranges. As we highlighted yesterday, the Financial sector has broken out of its short-term downtrend, and its move has really helped the overall market over the last week. Technology has been and remains in overbought territory, but it has yet to show signs that a pullback is imminent.