Written by Gary
Premarkets down -0.6% primary because WTI oil dropped into the $50 range, marking another new 5 year low. Markets opened lower with a large number of BTFDers jumping in temporarily halting the slide before SPY touched -0.9%.
By 10 am the averages were still falling on moderate volume mostly on ‘oil shock', but I do not see a bear market forming just yet. However, I would be cautious.
The trick here is that the next several sessions may be down, but the uptrend has not been broken. I am looking for a sharp rebound – of some sort! In other words this bull market is not done yet.
Our medium term indicators are leaning towards sell portfolio of non-performers at the opening and the session market direction meter is 81% bearish. We remain mostly conservatively bullish (even now), neutral in other words. Right now now I am getting very concerned any downtrend (like this one) could get very aggressive in the short-term and any volatility may also promote sudden reversals. The SP500 MACD has turned down, but remains above zero at +7.51. I would advise caution in taking any position during this uncertain period and I hope you have returned your ‘dogs' to the pound.
Having some cash on hand now is not a bad strategy as market changes are happening everyday. As of now, I do not see any leading indicators that are warnings of a ‘long-term' reversal in the near-term. There may be one later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market.
Investing.com members' sentiments are 53 % Bearish.
Investors Intelligence sets the breath at 54.9 % bullish with the status at BearConfirmed. (Chart Here ) I expect a market reversal at or before ~25.0 should the markets start to descend.
StockChart.com Overbought / Oversold Index ($NYMO) is at +6.13. (Chart Here)But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.
