6 Mar 2012

After I think two months (yes about two months) of me saying the market was overbought, we finally saw the weakness show up in the indexes.

Shockingly after one near 2% decline in the indexes some of my favorite indicators are showing that they are near oversold conditions.

Remember that my indicators are better at finding bottoms than tops (e.g. bottoms seem to culminate in panics while markets can melt up in small increments for a long time).  I think humans reach optimism more slowly than they respond to fear.

 Mostly oversold in the shorter time frames.  Another view below.

 TSV (middle) showing signs of getting low.  RSI still in the middle.

 Buying climaxes spiking again.  It is reaching a fairly high value considering how many less highs (roughly half) we had during this bull cycle - see below.

Medium term in a rapid decline.  Neither overbought nor oversold.

Short term can be considered oversold, but it has not surpassed previous extremes.

"If stupidity got us into this mess, then why can't it get us out?" 
Will Rogers