Over the course of the last two months stocks have become toxic in the sense that nobody wants to buy them. Below we posted a chart showing the correlation of the average S&P 500 member with the index over the last 50 days. As shown, correlation is currently as high as it was in October and November 2008. This means that when the market is down most stocks are also down and even the best stock picker will have to accept the market's daily fate.
On the bright side, we saw in 2008 that correlation levels this high were not sustainable and since this is a trailing indicator the worst might be over. Correlation peaked at the end of the decline in late 2008; not at the beginning.