Oversold In Pictures

For the first time since early July the market is oversold as you can see in the chart below.
Here is a look at the raw data that makes up this indicator below. As you can see for the next four days we will be dropping negative numbers which I highlighted in red. That is the reason I am looking for the market to rally through the end of the week.
Sentiment is mostly negative as surveys, Rydex data and the sudden awakening of Wall Street analysts to a second half slowdown all point to a gloomy investment community. My only reservation is that the put/call ratio showed a little too much enthusiasm yesterday. But with the oversold reading and the majority of evidence pointing to negative sentiment, I believe a buy on the bad housing data will yield a profit by the end of the week.

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