Markets have entered oversold area, again.
$NYUPV closed at 73.82
$NYUD:$NYUPV closed at -12.94
$NYAD, the daily, closed at -1908. -2000 is better but this probably close enough.
92% of volume went into declining issues, another sign market is oversold.
$TRIN closed at 3.24, so this is showing oversold, too.
P/C Ratio closed at 1.28 showing that fear levels are near peaking.
The way this ought to work tomorrow, unless something has changed, is that you can expect residual selling early in the session followed with some kind of bottom within two to three hours of the open. If something has changed, then we could have another deeply red day tomorrow but so far all that’s managed to happen lately is one down day and then the dip buyers come to the rescue. Time, of course, will tell.
Chart of IWM in the 60 minute time frame.
You can see on the chart that IWM has put in a series of bull flags since the 10/4 intra-day low. Buying the break outs of these bull flags has been a good strategy for traders.
While I have drawn a down channel and possible bull flag on the chart, it isn’t a very good bull flag so I’m fudging a bit here. Still, this is a bull flag until we start taking out swing lows, and then it’s something else. These are pretty easy to watch because they either work within a session or two, or they morph into something else. I would really like to see the RSI on the 60min chart drop to 30 or below and then for IWM to break out of this potential bull flag, but I rarely get what I want.
Chart courtesy of FreeStockCharts.com
Daily chart of $SPX showing how it has come back inside the rising channel that I’ve been tracking in the weekly time frame. The chart looks good and a drop to the 20MA would be good in that it would remove some of the froth from the markets, but for all I know, today was it and tomorrow we’re off to the races again.
Chart courtesy of StockCharts.com