The percentage of stocks in the S&P 500 currently trading above their 50-day moving averages stands at 78%. As shown in the chart below, this is getting up to the top end of the range the indicator has seen during the bull market. It still has a little bit farther to go before it reaches extreme overbought territory.

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Standard and Poor’s recommends overweighting healthcare (proxy XLV) and industrials (proxy XLI), and recommends underweighting utilities (proxy XLU) and telecommunications (proxy VOX), as of 03/02/2010.

They see the Operating Earnings P/E to 5-Year Projected Operating Earning Growth for each sector as:

Below we highlight the estimated year-over-year earnings growth for the S&P 500 for the next three quarters, along with expected growth ex financials. While ex-financials growth was low in Q4 '09, it is also beginning to pick up again. For the first quarter, S&P 500 earnings are expected to be up 28.7% versus Q1 '09. Earnings are expected to grow 28.6% in Q2 '10, and then drop a little to 22.3% in the third quarter.

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