August 24, 2017

Are the signs pointing towards an intermediate-term decline?

The major benchmarks finished slightly lower today after an intraday bounce off of oversold levels. Since the rally that began back in July (and typical in uptrending markets) oversold readings have been good buying opportunities, particularly the tech-heavy Nasdaq 100 (QQQQ). However, this time seems to be slightly different. The bounce off of today’s intraday oversold reading was not nearly as powerful as what we have witnessed recently. This could be the initial signs of intermediate-term weakness going forward. The market is still in an uptrend so the bears should not yet rejoice, but a few more weak buying attempts off of oversold by the bulls could lead to a decent correction. The bearish indicators that have piled up over the past few months might finally be too much for the bulls to overcome.

Have a great weekend!!!

Oversold/Overbought levels for January 26, 2007

  • SPY – 41.8 (neutral)
  • DIA – 40.3 (neutral)
  • IWM – 51.1 (neutral)
  • QQQQ – 36.0 (neutral)
  • OIH -47.8 (neutral)
  • GLD – 71.5 (overbought)

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Have a great night!