Seeking Alpha

Stocks are as oversold today as they were since the doom-and-gloom days of the financial crisis,...

Stocks are as oversold today as they were since the doom-and-gloom days of the financial crisis, says Bespoke's Paul Hickey. In total, 5 out of 10 S&P 500 sectors are now three standard deviations from their 50-day moving average. "This is as oversold as they have been at the lowest points," Hickey says. "We simply haven't gotten more oversold than this versus the 50-day."
Comments (17)
  • Sleestakk
    , contributor
    Comments (121) | Send Message
    Or perhaps stocks were "overbought" and now correcting to proper levels?
    18 May 2012, 07:53 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
    It is way way way oversold. A gigantic rebound is coming.
    18 May 2012, 07:57 PM Reply Like
  • joe kelly
    , contributor
    Comments (1810) | Send Message
    I hope you're correct. May has sucked and a third of my portfolio is cash.
    18 May 2012, 08:38 PM Reply Like
  • That_Guy
    , contributor
    Comments (74) | Send Message
    Ummm...maybe people are using that thing in between their ears and are choosing not to participate a rigged game.
    18 May 2012, 08:10 PM Reply Like
  • J 457
    , contributor
    Comments (956) | Send Message
    Due for a bounce next week! Did the world stop using coal this year, or is this the buy of a lifetime? Now lower than the low's of March 2009. ANR, ACI, JRCC. Some names at decade lows. Same with NG stocks, ECA, UPL, PTEN, KWK, XCO. I'm out of the momo junk and into the companies that have hard assets in the ground. Gold/silver stocks look good too.
    18 May 2012, 08:19 PM Reply Like
  • sr1977
    , contributor
    Comments (354) | Send Message
    Stocks are just catching up (finally) to the credit markets, which have been less optimistic about the future for some time now. They say Stocks climb a wall of worry; Well, over the last few months IMO that wall has been the credit markets. With the European banks, Greece, Italian and Spanish sovereigns tanking and the US debt/tax cliff not far off, plus an upcoming election, JP Morgan, Face Plant Fail etc., the credit wall is finally too high. So for for the moment at least we are headed lower.


    Not saying things won't turn around at some point, but you have to wonder when the grind of peak debt, population & the cost of oil start to really extract their toll on the many advanced economies who have governments that apparently have no solutions to those fundamental problems.
    18 May 2012, 08:22 PM Reply Like
  • RSI Raistlin
    , contributor
    Comments (403) | Send Message
    after selling out in mid-February I've been back in this week and a little last week. Every stock in my portfolio know has 14 day RSIs under 25.....I'll take it. CMI, DAN, CEVA, CLF ( maybe a flyer on JPM next week if this beat down continues)
    18 May 2012, 08:28 PM Reply Like
  • davidbdc
    , contributor
    Comments (3184) | Send Message
    Well I'm afraid we may have a few more standard deviations to go.


    The stage is set.


    Greece elects a guy that says they will simply renounce their debts.


    Portugal and Spain slide further into debt and say..... "why don't we do that too!"


    US Politicians are reported talking about another try at "compromise on spending and the deficit". We saw how that turned out the last time.


    That trifecta can get us a lot lower across the board.
    18 May 2012, 08:35 PM Reply Like
  • Rubenov
    , contributor
    Comments (435) | Send Message
    Greeks are actually wising up and the last poll showed that guy lost his lead. I think them seeing that they will lose their Euros started the bank run and actually showed them the communist dude is dangerous.
    18 May 2012, 08:58 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9964) | Send Message
    Yes, it is still a long long ways down yet to even just reach the 2011 lows much less get to what some estimate as real fair value on the S&P.


    This relatively minor sell-off in May/12 is likely just the start of further downside for May-August/12.
    18 May 2012, 09:20 PM Reply Like
  • Hendershott
    , contributor
    Comments (1618) | Send Message
    18 May 2012, 08:59 PM Reply Like
  • Gatesh
    , contributor
    Comments (25) | Send Message
    Sure, a bounce is probable but I would trade it with a tight stop.
    The bear has taken hold. Don't look into the rear view mirror folks.
    1257 on the s&p this summer is quite likely IMO.
    If you are not trying to trade the bounce then sit tight until June passes and see what happens. I got stopped out a while looking good.
    18 May 2012, 09:35 PM Reply Like
  • berniespear
    , contributor
    Comments (251) | Send Message
    Market will keep going down lower for a bit more.


    Fed will put a stop to it and the bulls will run.


    Just in time for Obama's re-election.


    Wish I had more cash and not locked in.
    19 May 2012, 02:46 AM Reply Like
  • User 342301
    , contributor
    Comments (2) | Send Message
    Not at all the case on MACD, slow stochastic or Williams%. You have not broken the 40- and 80- week EMA. Besides, we never ended the financial crisis(and I am not just eluding to the European sovereign debt and banking crisis we are in, just look at the M2 Velocity for e.g.), economic momentum is seriously slowing in the US and elsewhere in the DM and EM world, and earnings for 2012 may well be much too high...
    19 May 2012, 04:21 AM Reply Like
  • King Rat
    , contributor
    Comments (954) | Send Message
    "Three standard deviations". Fancy language to say, "9 out of 10 times we're not this far from the 50DMA"... except for nearly every time the market tops... Furthermore, as recently as last year we were even further from a FALLING 50DMA in August and saw lower lows in November.
    The only reason for the turnaround was Op. Twist and the ECB purchasing US equities.
    The only two things more annoying than a technician, are first, a technician who intentionally neglects to tell the other half of the story that disagrees with what they have to say. Next is such a technician who insists on proselytizing their technical viewpoint in the hopes of convincing others.


    Sure, the market is seldom this far from the 50DMA, but AAPL was once way above its 50DMA at 300. Going short for that reason alone would have led to painful haircuts. Likewise, if you want to go long the market now, come up with a better reason than a single, oft-misleading technical indicator.
    19 May 2012, 05:10 AM Reply Like
  • DianeLee
    , contributor
    Comments (365) | Send Message
    Personally watching fundamentals, but won't be buying without a strong catalyst. Nibbled one (or a few) too many sucker rallies. Plus, we're looking into something of a perfect storm in politics and international finances. Interesting times.
    19 May 2012, 06:35 AM Reply Like
  • credit_man
    , contributor
    Comments (180) | Send Message
    there will be no strong rebound before the greek elections mid june.
    volatility will be with us meanwhile.
    No doubt that there is value in the market currently but this is not a US
    driven market at all.All eyes are on europe situation.reason why mr Hollande received such a welcome boost by Obama and clinton.......
    19 May 2012, 09:39 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs