New e-mails are rolling in. Last week they told me the US
market was seriously oversold. This week, they are telling
me we put in a solid bottom and because the oversold was so
deep, the market is poised to run on the upside for months. I
agree with the deep oversold condition. Coming into this week,
my six week selling pressure gauge was about as oversold as it
gets. Readings at this level are consistent with strong rallies
even in bear markets. The SP500 is still nearly 5% below the 25
day M/A, so it is still oversold.
The SP500 closed today around 1353, and must take out 1360 in the
next day or two to signal a short run reversal to the upside.
It may be a nice test, as we have witnessed a super quick run-up
from the 1260 - 1270 area, which is, by the way, the new low test
zone. There is also chart resistance around 1375.
From my perspective, it is now timely to take a longer view of the
market, which is what I'll do in the next post or two.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!