Getting Closer To A Rally

Most market observers were not happy with yesterday's action. Many expected a stronger bounce after the three day, 60 point plunge on the S&P 500, as did I. What I liked about yesterday's action is that it seemed to have turned many people negative and that is a step in the right direction.

Rallies start when markets are oversold and most participants don't like the market. Rallies end when the market is overbought and the crowd is bullish.  The market will be maximum oversold by the end of this week. I believe a gap lower this morning would be an opportunity to start beefing up long positions in anticipation of the oversold reading.

No comments: