I have argued on a number of occasions recently that I thought stock markets were in a corrective phase, expecting the process to continue to mean revert (at least partially) to the key moving averages.

The tables below indicate how the correction is coming along, with the top table showing mature markets and the bottom one emerging markets. The key numbers to focus on are the columns titled "STDEV from 50 Day" and "STDEV from 200 Day". The figures show how many standard deviations various stock market indices are above the moving averages (red) or below the averages (green).

In short, many indices have already reverted meaningfully, but others still seem to be at extended levels relative to the moving averages, implying further downside / ranging.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.