79% of S&P 500 Stocks Oversold

As of yesterday's close, 78.8% of the stocks in the S&P 500 were trading more than one standard deviation below their 50-day moving averages.  On the flip-side, only three stocks (NKE, UST, and WY), or less than 1% of the index, were trading more than one standard deviation above their 50-day moving averages.  On a net basis, 78.2% of the stocks in the index were oversold. 

Since 1990, there have been 36 other days where more than 75% of the stocks in the S&P 500 were oversold on a net basis.  In the chart below, we highlight each of those occurrences.  While several of these occurrences resulted in good buying opportunities, we would note that in July 2002, this extreme oversold situation lasted for most of the month while the S&P 500 declined by more than 10%.  More recently, in the current bear market, this is the third period where we have hit extreme oversold levels.  While the market rallied following each of these periods, both runs were short lived.

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Comments

[dj]

nope,not yet, 976 then will talk

[fisynuts]

"Since 1990 ..."