The S&P 500 has had some big moves up and down over the last five days, but the index has essentially gone nowhere. As shown in our trading range chart of the S&P 500 below, the index is just about at the level it was at to start the month. One thing that the sideways action has done, however, is allow the index's 50-day moving average to play catch-up a little, making the market a little less overbought than it was a week ago.
A widely followed short-term breadth indicator has actually moved back into neutral territory from overbought levels. Below is a chart of the 10-day advance/decline line for the S&P 500, which measures the average daily number of advancers minus decliners over the last ten days. As shown, after trading overbought (the red zone) for most of January, the 10-day A/D line is now neutral.
While it may seem like this market remains overheated, it has definitely taken a breather, just not in the typical sell-off fashion.