It is an understatement to say the market seems unable to find a bottom. As the chart below shows, the market remains firmly in a downtrend and has broken through the triple bottom support. The next support level is near the March 5, 2007 close of 1,374. Although this was a quick move to the downside, volume of over 4 billion shares suggest this maybe wasn't a capitulation trading day though.
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S&P 500 stocks trading above their 50-day and 200-day moving averages are approaching oversold levels though.
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The market is approaching an oversold level when looking at the percentage of stocks trading below their 50 and 200-day moving averages. Additionally, bullish investor sentiment is at low levels. In the end, the market may be setting itself up for a bounce to the upside as we move into earnings season. As noted in the below chart for Apollo Group (APOL), the company had a positive earnings report after the close today. The stock jumped 7.8% or $5.34 in after hours trading.
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