Advances in September and October by the S&P 500 have pushed the index into overbought territory and may have laid the groundwork for an equity bull market in 2011, according to an analyst.
Speaking to the Financial Post’s Jonathan Ratner, Martin Roberge of Dundee Securities suggests that the current slide in equities markets is likely due to an unwinding of overbought conditions from the past two months, resulting in a percentage of rising stocks of 55%.
Roberge explains that in the past three cyclical pullbacks the S&P 500 only stabilized when the percentage of rising stocks fell to about 45%.
His advice? Buy now, before the equity bull market commences.