- ChartAdvisor.com: “The markets continue to deteriorate, and while a bounce is likely soon, the markets can always become more oversold first…These are the markets that separate the traders who are consistently profitable from the revolving door of amateur traders. Undisciplined traders simply get eaten alive in this market.” Interpretation: don’t start any new positions. Stick to your trading principles.
- Schaeffersresearch.com: More or less the same as ChartAdvisor.com.
- Vix: 21.85, above all the 20, 50 and 200 day MVA. However, VIX was as high as 35.32 in May 2010, and almost 30 in March 2011. So there is room for more volatility.
- Major market indexes: DJI and SP500 are all just above their 200 day SMA, whereas NASDAQ has already broke below 200 SMA. The markets are at a critical juncture at this point.
- Uncertain market moving factors: other than the Greek factor (Alan Greenspan thinks Greece will very likely become insolvent), the US debt ceiling is another major problem. Obama and Boehner golfing together is a good sign that 2 parties are talking, at least).
- What am I going to do? Be safe than sorry. Playing it safe.
While the markets are very oversold and technical indicators all point to an increasingly likelihood of a rebound, an oversold market can always get more oversold.
