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We have held steady in the view that there has not been a bout of capitulation on the part of investors. We have shown this dynamic by looking at the difference between new highs and new lows, as well as by the lack of a blowout reading on the VIX. Today, we note that there has not been an explosion in the percentage of stocks reaching oversold levels. We are defining oversold as an RSI reading of less than 30. Generally, capitulation can be seen when this metric crosses above 60%. Thus far, we have not come close.

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S&P 500

The percentage of stocks that are members of the S&P 500, which have an RSI reading of less than 30, has been trending higher for a year but has yet to reach levels that would signal capitulation.

S&P 400

For the S&P 400, the percentage of stocks reaching oversold levels has not been able to make it much past 30 during the current drawdown.

S&P 600

Ditto for Small Caps. The percentage of stocks in the S&P 600 reaching oversold levels has not gone above 30% during this bear market.

S&P 1500

The S&P 1500 is simply all the stocks that make up the three indexes that we just examined. It is no surprise that we have yet to see capitulation here as well.

*Inspiration for this note came from a post that I recently saw by my friend Andrew Thrasher.

**Please note that due to travel plans, our research will be distributed on a modified schedule from June 24th – July 6th.

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Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.