This is Going to Make the Next Three Days Quite Interesting
The major indexes do not fully reflect the underlying deterioration that has occurred in the market place. Nearly 20% of the S&P 500 stocks come into the day with 2-period RSI readings under 5. This type of reading usually occurs after the indexes have been hit hard; not after small pullbacks. What we will see here is a pick-up in movement, meaning either a rally or a continued move down will likely be larger than normal.
With so many stocks so oversold the natural move would be higher but the concern is that volatility has risen and the bullish sentiment remains extremely high. This combined with earnings and Friday’s jobs report is going to make the next three days quite interesting.
Today’s Potential Opportunities on Further Pullbacks:
Stocks: CL
ETFs: IWM