After three consecutive small down days the markets is now officially short-term oversold with SPY having a ConnorsRSI reading of 23.93 this morning.
Ideally we’ll see a healthy 1-2 days of additional selling because the market got frothy. The good news is it has begun crushing the traders who speculate in the small cap hyped stocks. Look at the charts from the past few weeks on PRKR, OXBT, and ONVO and you’ll see the same story. Small cap companies getting hyped especially through social media and then getting crushed. People who go long these stocks tend to be extremely weak money and in healthy markets the quicker these stocks get hit, the healthier it is in the long term.
Today’s Potential Opportunities on Further Pullbacks: