Percentage of Oversold Stocks Highest Since March
Bespoke Investment Group nails it once again:
"Stocks are considered to be overbought whenever they are trading more than one standard deviation above their 50-day moving average, and are oversold whenever they are one standard deviation below their 50-day.
Yesterday, the percentage of stocks that are currently oversold exceeded 50% for the first time since March 16th. As shown in the chart below, over the last year prior spikes where the percentage of oversold stocks exceeded 50% led to at least short term rallies in the S&P 500. After five straight weeks of losses, bulls are hoping that history repeats itself."
Yes, there are a ton of oversold stocks. Yes, this week the major indexes are testing key trendline support levels. But remember that the Markets can stay irrational longer than you can remain solvent (John Maynard Keynes). Don't forget that.
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