The Outlook For This Week

I expect a rally to start some time this week. As I showed in yesterday's column, we are maximum oversold but sentiment has not yet reached an extreme. If we could get a scare at the beginning of this week that lines sentiment up with the oversold reading, that would set up for a stronger rally. Regardless, I believe the market will rally this week.

Once the oversold condition is worked off by the market rallying or possibly by chopping around, I expect the market to take another leg lower. But that is not this week's business.