After an earthshaking selloff Thursday and Friday, and despite early indications of another brutal day Monday, several market strategists are already calling for a bounce—and looking out for potential opportunities amid the wreckage.
Read MoreDow futures skid over 450 points as Wall Street preps for steep selloff
"Key indicators reach required levels to go 'all in,'" Canaccord Genuity's chief U.S. strategist, Tony Dwyer, wrote in a Monday morning note. "With such pronounced weakness underneath the widely followed indices, we believe much of the global economic and Fed-related uncertainty is largely priced into the average stock, and now even the closely watched indices."
Dwyer had been waiting for four indicators to signal that it was time to take an aggressively bullish position on stocks: A jump in the CBOE Volatility Index to 20 or higher; a falling percentage of stocks above their short-term moving averages; weakening market momentum according to a separate technical indicator; and a declining number of bulls according to the Investor Intelligence newsletter writer survey.
"All four of our intermediate-term buy signals have hit required levels that surround a significant and sustainable low," Dwyer wrote.
For RBC's chief U.S. market strategist, Jonathan Golub, the lack of a clear catalyst for a swift selloff is a bullish tell.
"What has been most interesting about last week's 6 percent market decline is the absence of a visible catalyst. 2Q corporate results have broadly surprised to the upside and signs of global financial distress remain well-contained," Golub wrote in an early Monday note. "History shows that buying stocks following a spike in volatility in the absence of a well-defined catalyst is a winning strategy."
Meanwhile, Oppenheimer's chief market strategist, John Stoltzfus, attempts to situate the sudden selling into a broader context.
"Ironically but not atypically, it is little or no surprise that for all the marketplace chatter a little while ago about the need to see a pullback to get valuations in line, stocks more attractively priced and an entry point more clearly defined, now that stocks may well be 'on sale,' concerns about just how much more stocks could fall from here appear to be gripping more than a handful of investors and keeping not just a few from searching for babies that got thrown out with the bathwater," Stoltzfus wrote Monday.
Running a screener based on dividend yield, analyst price target versus current share price and the percentage drop since the end of April, Stolzfus recommends investors look to names including Coach, Best Buy and Microsoft.
