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Every major stock market bottom has been marked by extremes. Volatility hits a fever pitch, sentiment sours to extreme fear among investors, and market breadth (participation) becomes feeble. Most recently, major volatility spikes and end-of-world sentiment marked the lows of the 'Liberation Day' and COVID-19-induced bear markets.
However, in rare instances, extreme readings in technical and market indicators can occur during "garden variety corrections", where the S&P 500 Index and the other major indices are still within shouting distance of all-time highs. Currently, this is exactly what is occurring in the stock market. Although the S&P 500 Index and Nasdaq are each within 6% of all-time highs, investors are extremely fearful. Below are 3 extreme market readings that signal a bottom is nearby.
The McClellan Oscillator is Extremely Oversold
Market breadth, or participation, is one way to gauge how extreme market selling is. When the number of advancers reaches a very low level, it can signal to savvy investors that panic selling is underway, and sellers are likely to be exhausted soon. The McClellan Oscillator measures the Net Advances (Advances-Declines) on the New York Stock Exchange (NYSE) or S&P 500 (SPX). According to data from X user Subu Trade (@SubuTrade), "despite being within 5% of an all-time high, the SPX McClellan Oscillator is extremely oversold." "This setup has occurred 10 times previously, and SPX was higher every single time one month later with an average gain of 3.2%."
Meanwhile, yesterday, the NYSE McClellan Oscillator reached its lowest level since the 'Liberation Day' market bottom in April 2025.
Fear/Greed Index Hits "Extreme Fear
The CNN "Fear & Greed" Index combines seven different indicators to monitor stock market behavior. The index uses market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand to "gauge the mood of the market." Despite the subdued correction in equities, the CNN Fear/Greed Index registered its first "Extreme Fear" reading in 2026.
Active Investor Exposure is At Lowest Levels Since Mid-2025
The National Association of Active Investment Managers (NAAIM) is a survey that represents the average exposure to U.S. Equity markets as reported by its members. NAAIM exposure printed its lowest level since May 2025.
What to Buy?
The indicators described in this article suggest that the market is ready to continue its bullish phase. Investors should buy the stocks that have held up the best during the market downturn. One group with stellar fundamentals and technical action to watch is the AI infrastructure stocks, which include names like Nebius, IREN, Sandisk,Micron and Bloom Energy.
Bottom Line
Market history proves that the most rewarding entries occur when the technical "rubber band" is stretched to its limit and the crowd is bracing for a crash that hasn't arrived. With breadth and sentiment indicators at extremes, now is the time for investors to pay attention.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Nebius, IREN, Sandisk, Micron and Bloom Energy
For Immediate Release
Chicago, IL – March 16, 2026 – Today, Zacks Investment Ideas feature highlights Nebius (NBIS - Free Report) , IREN (IREN - Free Report) , Sandisk (SNDK - Free Report) , Micron (MU - Free Report) and Bloom Energy (BE - Free Report) .
Price & Sentiment Dislocate: 3 Rare Buy Signals Emerge
Be Greedy When Others Are Fearful
Every major stock market bottom has been marked by extremes. Volatility hits a fever pitch, sentiment sours to extreme fear among investors, and market breadth (participation) becomes feeble. Most recently, major volatility spikes and end-of-world sentiment marked the lows of the 'Liberation Day' and COVID-19-induced bear markets.
However, in rare instances, extreme readings in technical and market indicators can occur during "garden variety corrections", where the S&P 500 Index and the other major indices are still within shouting distance of all-time highs. Currently, this is exactly what is occurring in the stock market. Although the S&P 500 Index and Nasdaq are each within 6% of all-time highs, investors are extremely fearful. Below are 3 extreme market readings that signal a bottom is nearby.
The McClellan Oscillator is Extremely Oversold
Market breadth, or participation, is one way to gauge how extreme market selling is. When the number of advancers reaches a very low level, it can signal to savvy investors that panic selling is underway, and sellers are likely to be exhausted soon. The McClellan Oscillator measures the Net Advances (Advances-Declines) on the New York Stock Exchange (NYSE) or S&P 500 (SPX). According to data from X user Subu Trade (@SubuTrade), "despite being within 5% of an all-time high, the SPX McClellan Oscillator is extremely oversold." "This setup has occurred 10 times previously, and SPX was higher every single time one month later with an average gain of 3.2%."
Meanwhile, yesterday, the NYSE McClellan Oscillator reached its lowest level since the 'Liberation Day' market bottom in April 2025.
Fear/Greed Index Hits "Extreme Fear
The CNN "Fear & Greed" Index combines seven different indicators to monitor stock market behavior. The index uses market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand to "gauge the mood of the market." Despite the subdued correction in equities, the CNN Fear/Greed Index registered its first "Extreme Fear" reading in 2026.
Active Investor Exposure is At Lowest Levels Since Mid-2025
The National Association of Active Investment Managers (NAAIM) is a survey that represents the average exposure to U.S. Equity markets as reported by its members. NAAIM exposure printed its lowest level since May 2025.
What to Buy?
The indicators described in this article suggest that the market is ready to continue its bullish phase. Investors should buy the stocks that have held up the best during the market downturn. One group with stellar fundamentals and technical action to watch is the AI infrastructure stocks, which include names like Nebius, IREN, Sandisk,Micron and Bloom Energy.
Bottom Line
Market history proves that the most rewarding entries occur when the technical "rubber band" is stretched to its limit and the crowd is bracing for a crash that hasn't arrived. With breadth and sentiment indicators at extremes, now is the time for investors to pay attention.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.