Hundreds of New Lows Shows Distrust of Market Continues

Just before the market closed Friday, I saw there were over 400 companies that were at 52-week lows. By any measure, that’s a TON of stocks that traders have given up on as the market continues its move lower.

Some of the companies hitting fresh lows carry a lot of weight, both as individual stocks and in their respective sectors. For example, Intel (INTC) hit a new 52-week low on Friday, a level not seen since October 2018.

In the case of INTC, the stock has lost 41% of its value since the April 12, 2021 high. And there’s no indication that a bottom has been hit, with the next price support level being $37.72, dating back to February of 2018.

Another stock hitting a fresh 52-week low is Goldman Sachs (GS), with financials totally out of favor in spite of rising rates.

In the case of GS, you have to go back to February of 2021 to match the current price.

One would think that traders would welcome such nice discounts on stocks like INTC and GS, but that’s not the case. Instead, the 400+ companies reaching new 52-week lows point out how skeptical traders are to take on any positions. So, what’s it going to take to get traders off the sidelines?

It seems, at a minimum, we’re going to need to see the S&P retest May 20 low of 3810. And, as you can see in the chart below, another day like we saw on Friday, when the S&P fell 117 points at the days low, would do the trick.

The bottom line is that, in spite of big time discounts on stocks like INTC and GS, there just aren’t many takers; witness over 400 companies hitting 52-week lows. And unless we see further evidence that a bottom is in, it’s best to go slow and do whatever is necessary to maintain your precious capital. In the meantime, if you would like to get market insights and expert analysis in this uncertain environment from our Chief Market Strategist Tom Bowley, just click here to sign up for our FREE EarningsBeats Digest.

At your service,

John Hopkins