Saturday, November 14, 2015

Short Term Oversold Signals Abound - SPY Analysis 11-13-15

The outline I gave in the last post has followed pretty closely so far in subsequent market action.

Based upon the scan comparisons from the previous post, the current time frame would already have surpassed the final bear market rally highs from previous comparable markets in the cases of major sell offs following the stated scan conditions.  So the Nov 3rd high seems important in that regard.

Currently with stocks down several days in a row, the hourly VIX chart is set up in an extreme that has typically preceded significant rebounds in stocks at least for several days.

The hourly MACD chart of SPY shows no bullish divergence at this time, so it may be premature for even shorter term traders to buy at this time.

Remember from the scan comparisons that the 2 months following previous similar markets were very strong to the downside.  Only very brief rallies punctuated those declines.  At this juncture the good put option purchase opportunity already seems past compared to when I posted those scan conditions 2 weeks ago.  So from here, I am kind of neutral but would suggest that stocks could sell off significantly.  The obvious stop loss point on a short position would be above the Nov 3rd high in SPY.


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