The S&P 500 (SPY) Is “Extremely” Oversold Rich Ross- October 12, 2018, 10:27 AM EDT SHARE ON: The Call: The S&P Futures (+30 last) finish the day higher by +55-65 handles and retest 2,900 in short order as the technicals now offer a compelling tactical setup for a Textbook V-shaped reversal higher with a 2,743 weekly closing stop today. “Extremely” Oversold: While Oversold conditions are not a reason in isolation to buy a stock or market, the S&P 500 has only been this oversold 6 times since 1990 and is currently more oversold than the depths of the financial crisis in ’08. Strong Seasonal Setup: We are entering a strong period of seasonality at the tail end of a 7% pullback, with extreme oversold readings, neutral positioning and the S&P and Russell 1000 Growth holding key long term support. Rest of World Better: Unlike in January when EM and “Rest of World” were historically overbought at all-time highs with positioning heavy and sentiment euphoric, Global Markets broadly speaking are in precisely the opposite position with their currencies starting to firm; commodities like Crude, Copper and Gold beginning to work; and Tencent rallying 8% off the 150 week ma which has never been broken. In Sum: The 7% correction was about 5% bigger than I thought it would be and I did not get out ahead of the recent decline, but I am getting out ahead of the tactical reversal with conviction.