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.