RSSSellers Becoming Exhausted
By Bruce Zaro | October 08, 2008 | 2:46 PM | 0 Comments
The supply of sellers continues unabated, with buyers watching and waiting for the trend to change. Any upticks in the market are being met with renewed selling. How lopsided has the seller’s upper hand become? 1974 and 1987 – like.
The accompanying chart shows a long-term perspective of the New York Stock Exchange Bull Percent. At the important lows of September 1974 and October 1987 the readings were of historical proportion: 8% in 1974 and 6% in 1987. The final reading for Tuesday, October 7th: 7.7%. Again, this means that less than 8% of stocks traded on the NYSE are in positive trends. You may feel surprised that there are any stocks in uptrends, but these are levels which are rarely seen.
Because we’re so oversold there should be so much upside when a rally finally gets started that it is fair to wait for evidence that a rally has actually begun before doing some buying yourself, but keep in mind: we are now dealing with washed-out levels of truly epic proportions. Fundamentally, a rebound feels out of reach here in light of the rapidly changing and gloomy headlines, but technically sellers should become exhausted anytime now.
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