Just a quick note.
The oversold bounce we said we expected took place yesterday in S&P (and Russel and elsewhere). NDX had a wild ride but managed to pull out of the depths of the day and close flat.
Internally, the market is still very oversold. Not as oversold as Monday but still oversold.
This is an interesting situation where price is not deeply oversold on daily frame, let alone weekly, but internals still look like a sold-out condition with room to expand
On the other hand, the shorter term 60-min frame has price in the oversold area, and some other areas of the market showed good price performance like PM, PM miners, health insurers (HUM had a +4% day).
So, the bounce has a good chance to continue. But it is hard to say if market has bottomed for another multi-day (if not multi-week) advance or whether this is just a dead-cat-bounce.
While, I am watching how market recovers from Monday's supply shock, I keep these levels in mind
1986 (held the decline yesterday, it's around the lower boundary of the channel on 60-min chart)
1186 (1180 held the decline and was retested)
Have a Good Day!
S&P 500 – May 15, 2012 - Bottom Line: Long term trend is up. Mid-term trend is down. Short-term trend is down Weekly S&P stage is Late Advance (2-C) Daily S&P stage is Strong Decli...
1 year ago