More Oversold Spoos/Stretched VIX

September 7, 2001
Dave Landry

Each evening we
focus on the most interesting aspects for the upcoming
trading day. The comments are based on observations of the
nightly updates of the Futures and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.

Once again, we have a plethora of buy/repeat
buy signals on the Market Bias page as the VIX continued to climb. As you know, we didn’t see any follow
through to the upside in index futures on Friday. In fact, they got creamed.
This leaves them severely oversold and due for a bounce. Therefore, for
the nimble only, look for buying opportunities in the September S&P futures
(
SPU1 |
Quote |
Chart |
News |
PowerRating). However, as mentioned recently, the
longer-term trend remains down. In other words, we’re still in a bear market.
Therefore, wait for confirmation in price and don’t overstay your welcome. One
last point, for the nimble daytraders, should we gap lower on Monday, you might
consider playing an opening reversal.