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.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.