U.S. equity indices are up across the board on a continuation of the oversold bounce.

Many have asked me why I don’t think we have seen the lows.  The answer lies within the chart below.  Most important bottoms show divergence of price and oscillators.  Last week’s lows came coincided with the lows in oscillators…so no divergence.  This is an important point not to be overlooked.

I continue to think 1340ish – 1360 or so may be where the oversold bounce ends but don’t have any skin on that trade.

The semiconductors too continue to look weak and with the SOX as a leading indicator trading below its 200 sma it doesnt spell much upside potential for stocks until that changes.

Stay in cash and be quick with trades, if you must trade at all.

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