The market is at an interesting juncture right now. The indices look like they’ve had nothing more than an oversold bounce last week. Most of the indices have had big percentage moves off of the lows but have failed to break their downtrends which began in May or June. They look like they could easily roll over and head lower again. But good old T2108 shows that the market is still pretty extremely oversold. As we know, when http://tradermike.net/tag/t2108/ drops under 20 that’s a good time to cover shorts and/or get long. T2108 actually got all the way down to 7.99 earlier this month and last week’s big bounce only brought it back to 19.41. So it’s still under 20 and I’d be very cautious about initiating bearish positions.
Again, the indices below have just had oversold bounces which have carried them back to or near their trendlines. They are actually becoming short-term overbought now although, as T2108 shows, they are still oversold on the longer (slower) timeframes…
|Trend||Nasdaq||S&P 500||Russell 2000|
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Post from: Trader Mike's Blog