The latest read of defense investment shows that real expenditures grew at nearly the slowest annual rate in a decade possibly indicating that defense spending may be entering a period of slowing or contraction.

So was the FY-2011 Defense budget a good one or a bad one? Well, let the markets do the talking.

Since the announcement of the budget on February 1st, the SPADE Defense Index rose by 4.46% in February and another 4% in the first days of March -- 240 basis points better than the broader markets.

Below we highlight some stats for industry group ETFs from our daily ETF Trends report over at Bespoke Premium. The ETFs are sorted by how overbought or oversold they are. For this analysis, an ETF becomes overbought when it is at least one standard deviation above its 50-day moving average (and vice-versa for oversold). The financial insurance ETF (KIE) is currently the most overbought of the ETFs listed below. It is overbought by 4.48% (4.48% higher than one standard deviation above its 50-DMA). The food & beverage ETF (PBJ) is the second-most overbought at 3.97%, followed by homebuilders (XHB), medical equipment (IHI), consumer services (IYC), and real estate (IYR). None of the industry group ETFs we track are currently in oversold territory.