Several technical signals suggest that the stock market is nearing oversold territory, but that doesn’t mean Wall Street is poised for a true rebound, according to Canaccord Genuity strategist Tony Dwyer. The Nasdaq Composite , S & P 500 and Dow Jones Industrial Average all closed below their 50-day moving average on Tuesday. And within the S & P 500, more than 85% of stocks are below their own 50-day moving average, Dwyer said in a note to clients Wednesday. But those technical signals aren’t enough to confidently buy the dip, Dwyer said. “The fact the market is oversold doesn’t mean the correction is over, it simply means the environment is ripe for a temporary bounce like mid-August, especially given the average NYSE stock is already down 30% from its 52-week high,” Dwyer said. The recent rise in bond yields will put a cap on any short-term rebound, according to the strategist. “Ultimately, there needs to be a significant and sustainable drop in U.S. Treasury, mortgage, and corporate bond yields for a more durable rally to take hold,” Dwyer said. The benchmark 10-year Treasury yield pulled back from a 15-year high on Wednesday morning, but was still trading above 4.5%. — CNBC’s Michael Bloom contributed reporting.
