Below is a look at our trading range charts for the S&P 500 and its 10 sectors. In each chart, the blue shading represents the sector's "normal" trading range, which is between one standard deviation above and below its 50-day moving average (white line). The red zone represents between one and two standard deviations above the 50-day, and vice versa for the green zone. Moves into or above the red zone are considered "overbought," while moves into or below the green zone are considered "oversold."
As shown, the S&P 500 has pretty much been trading in overbought territory all year now, and the index is currently at its most overbought levels in more than a year. Stocks and indices can stay overbought for a long time, but historically they have not remained as extended as the S&P is now for too long. We would expect some sort of cool down in the coming days.