Wow! That was pretty extreme. After the most severe sell program in the market since the ‘flash crash’ of 2010 sent US equities plunging for a second straight day, the S&P 500 finished at what can only be considered a ridiculously oversold level on Thursday at more than 3.7 standard deviations below its 50-day moving average. For reference, we consider 1-standard deviation below the 50-DMA to be oversold, and two standard deviations to be an ‘extreme’ oversold reading. We’ll let you use your own adjectives to describe a level nearly twice that. To put some perspective on that oversold reading, the last time the S&P 500 was more oversold was August 2015.
So, what now? There’s some good and bad news here, but only time will tell which one plays out. For some added insight, check out this week’s Bespoke Report.
We’ve just published our latest weekly Bespoke Report newsletter, which is available to subscribers across all three of our membership levels. Sign up here to read the report.
To get up to speed on our thoughts regarding the market’s direction going forward, choose any membership option and access this week’s full Bespoke Report newsletter after signing up! You won’t be disappointed. Some of the topics discussed in this week’s report include:
- Extreme Oversold Markets
- China Valuation
- Global Extremes
- Worst Sell Program Since the Flash Crash
- US or International
- Growth vs Value
- Economic Surprises on the Horizon
- Earnings Season Preview – What to Watch For
- Longest Streaks Above 200-DMA
- Market Breadth
- October Parallels
- The Importance of 9.9