Technician Jeff DeGraaf--we're extremely oversold

CNBC speaks with Jeff DeGraaf, ISI Head Of Technical Analysis Research:


Not since 1931 has the S&P been so far below its 200-moving day average, DeGraaf says, meaning the market is extremely oversold.

And new lows on the S&P has been contracting over the past several months, CNBC says, citing DeGraaf: "Even though we're 140 points below where we were in October, the number of stocks making those lows is about half. That's a bullish divergence."

Continuing, "These are good conditions but they don’t mean anything without a spark. On Tuesday we got the spark, DeGraaf says."

DeGraaf likes Sprint (S) and Morgan Stanley (MS).