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Volume suggests the S&P 500 rebound is corrective. Although the ‘market’ is oversold, it can stay oversold for a long time, according to analysts at Credit Suisse.

Key quotes

“Outright volume rose sharply as the market collapsed, but then significantly started to decline as the market rebounded. This behavior is consistent with the recent strength being a corrective move only in an ongoing downtrend.” 

“Key now will be whether volume starts to rise again if the market indeed resumes its fall. If it doesn’t, that may be a silver lining, suggesting we may hold the lows.”

“If this is a more significant bear trend/market, the number of stocks can stay at low levels for a long time.” 

“Individual Investor Bull/Bear ratio remains well below zero. Importantly though, sentiment has in time been significantly worse.”