Morning MoneyBeat: Are Stocks Getting Close to a Bottom?

by Kristen Scholer

Few expect the wave of selling and volatility that has overtaken the markets to retreat in the days or even weeks ahead.

But those who look at market technicals to divine future moves in stocks are striking optimistic views that an end may be nearing.

John Kosar, director of research at Asbury Research, expects “more near term weakness” for U.S. stocks, but he also thinks equities appear to be within weeks of an intermediate-term bottom.

As the S&P 500 sits 10% from its May 21 closing high, volatility has picked up, investor sentiment has deteriorated and stocks have entered oversold territory. These factors, plus negative momentum and an elevated put-to-call ratio, are the very reasons why Mr. Kosar believes a bottom could come within weeks.

“This combination of metrics has previously either coincided with or closely led every intermediate term US stock market bottom in recent history,” he said.

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