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Market Health Bounces from Oversold Conditions

This past week almost all of our indicators turned up from oversold conditions. So far the turns are slight. This indicates that the market is still under pressure even though price spiked higher. What I’m seeing looks like extreme uncertainty. Longer term market participants appear to be standing aside while traders are chasing. This adds a bit of volatility that will create larger range days both up and down on any news.

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One thing of note is that due to the oversold conditions and the distance our indicators need to travel to get above zero it is likely that it will be several weeks before we’ll make any changes to our portfolio allocations. The one exception is our core measure of risk. It could move higher over the next few weeks if the market gets to new highs and sustains the move.

Bottom line, we’re still waiting for clear conditions before taking any risk in the market.

 
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