Will it stick this time? That is, does the bear have any claws? Yes, according to Doug Short, who follows the OEXA200R. (More on this indicator in another post later this week.) It closed out the day at the critical 65% level. This is the point at which Doug Short advises one to sell all long positions in anticipation of a major market decline. What is particularly disturbing, according to Short, is the velocity with which the indicator has crashed - from 89% to 65% in just the past 14 days. At this point, one can probably expect a rebound from these very oversold levels before the down trend completely takes hold once Operation Twist (Fed's quantitative easing) ends on June 30.
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