In the chart below, we highlight the current levels of each S&P 500 sector with respect to their normal trading ranges. Red shading indicates that the sector is overbought (with dark red indicating extreme overbought levels), while green shading is indicative of an oversold reading. This chart is updated each morning in our Daily Morning Lineup, which is one of many reports included in the Bespoke Premium service.
While the majority of sectors were trading at oversold levels two weeks ago, every sector except Energy is currently overbought following the monster rally since July 10th. More importantly, the S&P 500 and six of its sectors are currently trading at or near extreme overbought levels. Given these overbought levels, it is rather impressive that so far today the Dow is holding up with only a modest decline of 20 points.
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