One Interesting Thing I Saw Yesterday
A 15% spike in volatility in two days and now the market has moved to being slightly oversold. As much as everyone expects/hopes for a bounce today, it would be healthier to take another down day into the weekend and flush out a lot of the “we can’t lose being long stocks!” mentality that exists out there.
The one interesting thing I saw yesterday which is out of the ordinary is that too many momentum stocks didn’t drop as much as would be expected. Either there’s a flood of many still waiting to buy these stocks, or the momentum folks have no fear. Ideally they’ll flush these people out ahead of the next move higher.
To see this go to the TradingMarkets Analytics Screener, https://analytics.tradingmarkets.com/Screener/ , click on the live screener, (green button) and sort by ConnorsRSI (double click ConnorsRSI to sort by the highest reading). Ideally few if any stocks are above 90. When you see the times when few are above 90, it’s often been a sign that the fast money is gone for the time being, and this often leads to healthy rallies.
Today’s Potential Opportunities on Further Pullbacks: