In five days, the U.S. election will be behind us, absent a contested outcome. Through Wednesday's close, the S&P 500 Index has been down seven consecutive days putting the Index down 4.2% from its August 15 close. This weakness in the markets is now showing up in technical indicators like the CBOE Equity Put/Call ratio. At the close Wednesday, the equity put/call ratio was reported at .99, which is an indication of extreme equity market bearishness from which rallies tend to occur.
Other technical market indicators are also indicating a market that is oversold or at least near oversold. As can be seen in the below market chart, the stochastic and money flow indicators are at levels that have coincided with an oversold market.
And lastly, the percentage of S&P 500 stocks trading above their 50-day moving average stands at 27%.
In summary, investors seem to be positioned for a…