The selling so far this year has been non-stop. Every breadth measure you look at is extremely oversold. The rubber band is stretched in the short-term, over the coming months and quarters, this could very well be the beginning of something bigger. Make sure you have a plan.
One of the most interesting breadth charts I just came across is the one that shows the percentage of stocks above their 20-day moving average. That number stands at 5% right now. Since 2002, we have never closed anywhere close to this range on a monthly basis, which includes 2008-2009 debacle, 2010 flash crash, 2011 Greece worries, and last year’s summer hit.
Frank Zorrilla, Registered Advisor In New York
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