Just for the record, Tuesday’s rally in $SPX looked good but did not meet the IBD follow through criteria. That follow through day would need to be a move of about 2% on very good volume. Tuesday’s rally took $SPX up 0.79% and that wasn’t enough.
We are currently short term very oversold. Today looked like capitulation and per several of the things I’ll list below it pushed breadth indicators into extreme oversold territory. I really like to have all the stars lined up and that is not the case right now. Still, we should see some kind of bounce tomorrow and it could last several days. If we don’t get a bounce then there may not be a floor under this market for quite some time. That Greek austerity package has passed so that could put some juice under the overnight futures, or not.
Here’s what we have:
$NYUPV closed at 77, when 80 is the line in the sand.
$NYDNV closed at 791 and this is in the range where the market has bottomed.
$NYADV closed at 556 when 500 is the line in the sand.
$NYUD:$NYUPV closed at -9.17 when -12 or less is clearly oversold. -12 or less works a lot better than -9 and this is one of the reasons that I think we’re just short term oversold and will bounce but that we may not necessarily be at THE BOTTOM.
P/C Ratio closed at 1.21. Would have liked to have seen this go to 1.25 or higher, but this is probably good enough for now.
$TRIN closed at 2.29 and so this is showing oversold.
90% of today’s volume went into declining issues so this is showing an oversold situation.
The reason I think this bounce, should it materialize at all, will be just a bounce is because of the following:
$NYMO w/Bollinger Bands is sitting 30pts above its lower BB and this is just not oversold enough.
$NYSI dropped by -28 pts today when a true climax signal will come with a drop in the -70 to -80 range.
Zweig Breadth Thrust closed at 47.22 today. A climax reading on ZBT comes at 40 or less so this is just not a good enough signal.
Daily chart of $SPX showing how it blew through an important support area today. If we don’t get back to the 1410-1420 area pronto, then we are in some serious trouble, IMHO.
I was stopped out of my TNA & UPRO and then, based on low readings of $NYUPV going into the close, I bought back some TNA & UPRO at the close. This may very well end up being a big mistake as I’m clearly front running so do not try this at home.
