Here’s a great piece of work from Barry Ritholtz on the current state of the stock market.  It’s not the typical “perspective” you’ve been hearing about…it comes with some actual data.  I’ll summarize, but it’s worth a read:

• From a trend perspective, the US stock market looks weak (Bad)
  • We broke the 10 month moving average, which isn’t a good sign and is historically followed by more price declines.

S&P500 + 10 Month moving Average

• From a technical perspective, the US stock market looks oversold (Good)
  • We basically had three days where all the US stocks sold-off on high volume.
  • This is the kind of action you need before ending a downtrend, we just experienced it over the span of three days, rather than three months.
  • Getting back to the May/June price levels is going to take more than three days, because people are sitting on losses and will look to “break-even” ASAP.

• From a fundamental perspective, the stock market has improved (Good)
  • Stocks are more reasonably priced (on the basis of Price to Earnings Ratio) then they have been for quite some time.

So it’s not all doom and gloom.  Just remember that stocks can go from oversold to very oversold, to ridiculously oversold before you see a rally.