Wasting Time

There are two ways to work off an oversold reading. The first is rallying and the second is going sideways. The market was maximum oversold 8 trading days ago and it is back to trading roughly where it was 8 trading days ago. Time is running out for the market as it is looking like it will waste its oversold reading by going sideways. There are still two days left but if the market does not make a move in the next two days I will step out of the way. Have a good night.

2 comments:

PJ said...

So you weight the oversold reading much higher than the put/call ratios?

I suspect the lunar New Year holiday may end up supporting the market a bit next week, with a Chinese "January effect."

Tsachy Mishal said...

I consider both. I liked it that both were supporting my positions. Losing the oversold will push me to the sidelines as I believe the intermediate term trend is down. In order to get short I would want to see the bearishness subside a bit and get passed the oversold reading.

I still think we could rally but the clock is ticking.