FYI: Here’s a memo to U.S. stock investors: One theory about finding the bottom holds that the selloff can’t end until everyone rushes for the exits at once.
The idea that the downdraft in stocks ends with a final surge of indiscriminate selling is known as capitulation. And with a 9.2% drop in the S&P 500 Index so far this year, stock investors are on the lookout for such an event.
But by one measure we’re not there yet. When that final rush comes, average correlations for the S&P 500 Index’s 10 sectors jump over 90%, according to Nicholas Colas, chief market strategist at Convergex.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/02/09/correlations-suggest-selloff-isnt-over-yet/tab/print/
