Based on things like $NYUPV and $NYUD:$NYUPV the market did not get oversold enough today to resolve some of the extreme overboughtness from yesterday. That doesn’t mean the market won’t bounce tomorrow and get back in the game, but it is more likely that we’ll see some more give back. The hit that AMZN is taking in the AH isn’t going to help $NDX bulls or the retail sector and could by itself bring about more selling. But I have seen tech darlings, like AMZN, get a whack job in the AH only to close in the green the following day so before you load up on shorts you might want to wait and see what the Big Boyz have in store for AMZN tomorrow. AMZN is owned heavily by institutions and they’re not likely to sit back without defending AMZN’s price. Or maybe not.
What I would like to see on the Q’s, IWM, SPY, & DIA is for their respective RSI’s on the 60min charts to drop down close to or below 30. This would mean at least one more day of selling. Since October 4th, IWM has bounced when the RSI has dropped down close to 40, but a better entry would/could/might/most definitely would come when the selling pushes the RSI to the 30 level. But of course, the mad men at the helm may have other plans.
Chart courtesy of FreeStockCharts.com
Stay on your toes. While I am looking at the current market situation as a potential buying op, I could be totally wrong and the market could head deep south.
If you’re not paranoid, you’re not paying attention.