Painful Pullback Not in Top 10 over Last 5 Years
Good Morning.
Even though this pullback feels painful (as all do), there have been 10 pullbacks larger than this one since 2009 so the market is nowhere near as extreme as what the past 5 years has seen.
Overall the US markets are oversold but short-term they are not at extremes. Most of the major indices have ConnorsRSI readings in the teens; good levels to be buying but things get especially interesting when they get into single digits. With the 200 day ma on SPY getting very close (less than 3 points away) this is where the bull and bear meet. On the negative side, the bull market in in its 60th month which is long. On the positive side, fear, as measured by the VIX, has increased by over 50% in 8 trading days. Such rises most times (most, not all) precede very large rallies. If you are bullish here, puts (or debit spreads) on VXX have the possibility to create asymmetrical returns.
For a free trial to the Daily Battle Plan, click here!
Today’s Potential Opportunities on Further Pullbacks:
Stocks
ETFs