Monday, May 21, 2012

Oversold, More Oversold, and Extremely Oversold

The market, as depicted by DJIA (See the following chart.), continues to be "oversold."  I still expect a so-called relief rally from these levels. From a technical perspective, the price has penetrated the 200-day EMA, which is very bearish over the intermediate term. (Just look at how both moving averages, 50-day and 200-day EMAs, are rolling over, not conducive for the bull camp.  Therefore, as indicated, I expect a bounce from these levels before the downward trend can continue.


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