The market remains oversold but it’s not quality oversold. The stocks they’re selling off are blue chip low volatility stocks (PG, JNJ) and high yielding stocks; a combination which is not a traditional formula for a large reversal higher. Add the complacent VIX into the picture and it all adds up to a picture that a large potentially volatile move is likely coming very soon.
Normally we’d expect this move to be higher but based on the current scenario the move will come very likely be in the direction created by a major news story.
Today’s Potential Opportunities on Further Pullbacks: