Sam Stovall, chief equity strategist at S&P, points to a fact that could encourage bullish investors, however: Since World War II, a sharp decline of 10 percent in more in the S&P 500 over one quarter has been followed by an average gain of 7.2 percent the next, he said.
"Investors are no better than hyperactive first-graders playing musical chairs and trying to out-anticipate the other," he said. "This is no different. They start to think the market is oversold, and they should buy it when it's cheap."
