Below we provide our 6-month trading range charts of the S&P 500 and its ten sectors. Moves into or above the red zone are considered overbought, while moves into or below the green zone are considered oversold. As shown below, the S&P 500 has been trading in an uptrend within the red zone for some time now. It typically bounces back and forth from the bottom of the red zone to the top, and it is currently at the bottom and trending higher.
The Health Care sector has taken off over the last week and is currently trading well into extreme overbought territory. In this regard, it's hard to ignore what a Scott Brown victory in Massachusetts might mean for health care reform. Aside from Health Care, most other sectors have pulled back slightly lately but still remain in uptrends.
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