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MATERIALS MOST OVERSOLD SINCE 2008

29 January 2010 by Cullen Roche 1 Comment

Today’s chart of the day comes to us courtesy of Bespoke Investments Group.  They note the extreme oversold conditions in the materials sector:

The 10-Day A/D Line for the S&P 500 Materials sector is currently more oversold than at any other point since October 2008.  It is also currently showing the eleventh most oversold reading since 1990.  In the chart below, we highlight each of those occurrences (all occurred after 2000) with a red dot.  In the week following the prior ten most oversold readings, the Materials sector has averaged a gain of 2.9% with positive returns 70% of the time.

Source: Bespoke

Cullen Roche

Cullen Roche

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Comments
  • Edna Rider

    I would doubt that during the 00-02 timeframe there was such a strong belief that China was responsible for such a large part of materials demand. Since China seems to be stalled at the moment, a bet for materials would seem to be a bet for China (next week or however long).

    01/29/2010 at 11:27 AM