Stock Market Corrected 1/3rd and Now Very Oversold

In Monday's post, we gave some "normal" targets for the correction, with many historical corrections taking 1/3 to 1/2 of the prior gains away before finding a bottom.  Those targets would equate to levels of 1573 (1/3) and 1513 (1/2).


Abracadabra.  Almost sooner than the words left the page, we got a low of 1560 on the S&P 500 and it bounced.  The stock market has now been pushed into a deep oversold condition as shown in the next chart.


Of course, the correction can go deeper, but in a large percentage of times that you get the orange and the blue lines in the chart above both in oversold conditions, you get at the very least a short-term rally.

We'll just have to wait and see what the market has in store for us.


Don Hays

If you are a subscriber to HaysAdvisory.com, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.

Please see important disclosures at the bottom of this page.