Take a look at the chart below. It shows the percentage of S & P 500 stocks above their 50 day moving averages (I usually use Telechart's T2108 indicator, but I am away from my laptop), and is currently hitting oversold territory at 20. However, the last selloff reached all the way down to around 5. While it might be prudent to take on a few small pilot long positions, I wouldn't make any big plays just yet.
4 comments:
Singh - I think you got some bad data. T2108 closed at 27.36 today. Cheers
A serious suggestion, don't try to bottom pick this market because you will get burn in the long term. We are in a bear market...leading stocks have lost their momentum, GOOG, AAPL, MOS, POT, TNH.
The market will trade lower for the year with few upside days, but it will still head lower. Look at the overall economy and financial conditions. There is something big going on and news reporters are not realizing or talking about it.
Marketguru
Anonymous,
In this post, I was using stockcharts data, not T2108. I realize T2108 is at 27, which is why I am hesitant to buy a bounce right now.
MG,
I agree that bottom picking is not the best strategy right now.
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