August 17, 2017

Seasonal Tendencies Do Not Disappoint

Our quote vendor is down tonight so there will not be an overbought/oversold report. Beginning next week we will be offering sector overbought/oversold readings which should be of great help to many of you. You requested it and now we are offering it. If there are other indices that you would like for us to add to the overbought/oversold list please do not hesitate to email us with your request.

Over the past few days I have stated that Wednesday begins a short-term (1-5 days) period of seasonal bullishness and given the “oversold” to very oversold” nature of the major benchmarks there could be a short-term bounce in the near future. Well, after quite a bit of volatility today the bounce finally took place at the end of the day.

The market sold off sharply after the strong opening which had many frightened. This is often the best time to take advantage of te current move, especially given the technical oversold readings that were in place. Often, when we see this type of pessimism in an already oversold market the probability of a short-term bounce is likely.

As I stated, the bounce came late in the day. After the bell the futures advacned sharply and if they hold up we could see a continuation of the bounce tomorrow. The Russell (IWM) is still in a “very oversold” state as it was the only proxy we follow that finished lower on the day. With the positive seasonal conditions ahead I would not be surprised to the IWM move into a neutral state in the next few days.

Again, we apologize for the brief post and the lack of our proprietary indicators on today’s post. Hopefully, we will be back in full force tomorrow.

Have a wonderful night!

Andrew Crowder, Chief Investment Strategist,