Thursday,
Capitulation is on!
The DJIA; which is already oversold as an average is now trading below the January and march lows now has an RSI indicator of 24.10… and the market will not suffer overselling without more fuel being added to the fire to justify the sell off – and we just don’t have justification for sustained oversold conditions like this… I am looking for a bounce, but now that we have triggered a new low in this pullback the analysis rules shift and tell us something about the future – the next bounce will require a test of the low as our last one did not hold, therefore when the market does get hot and heavy advancing forward we must resist the temptation to chase it, as we know it must test the low.
The NASDAQ; lost 79 points today, but I still don’t like it here and still see more down side as the same gaps we have been watching on this chart for the past few months still have not all been filled. The RSI is at 36 but compared to the DJIA that is not yet oversold… I still see more selling here.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market today and what to expect with the overall market tomorrow, came in at (04) and this is our flat reading, but after a major sell off of near 400 points today, I would not be surprised to see those late traders selling stocks lower tomorrow. Capitulation does not make sense, but it moves stocks when you have posts with these choice words floating around in the market:
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As always I recommend investors and traders, be smart, patient, and ever successful. If you own quality stocks at these levels, hold them and average down as the market shows the next bottom signal.