Markup Monday: Part Two

The market will be maximum short term oversold by tomorrow's close. At the same time we are about to enter the seasonally strong turn of the quarter. If the market were to decline into tomorrow it would setup an excellent risk/reward long opportunity. Unfortunately, markups have tended to occur two days before the end of the month which works out to today. Therefore it is unlikely that we will get that excellent setup and the rally has already likely begun.

How long can a rally last? I would expect that a rally would last through this week and part of next week. After this rally risk will be much higher as the oversold readings will no longer serve to buoy the market.

No comments: