E-mini S&P500 Starts to be OVERSOLD

By -

All right, today just a quick analysis, hopefully it can be helpful to Slopers that are thinking to go SHORT right now…

First of all, please check our previous post from February 23 where we insisted it was time for a SHORT trade. That was two weeks ago.

Now, the market is tanking and it has made a bit of road down already, so let’s have a look to what our model say, where is the limit for this “correction” ? Just to avoid going SHORT at the bottom…

Here below is our model, we have highlighted the levels corresponding to the price area where we are now (~2040), DAILY, WEEKLY and MONTHLY:

>> Click here if you want to receive this analysis every day in your inbox.

As you can see the DAILY time period is severely OVERSOLD (>86%), this will see a bounce soon. The limit is 1965.75, but these limits are reached only during extreme corrections and we do not know if this is one of them. WEEKLY and MONTHLY are showing less oversold values, around 36-37% on a 100 scale, so there is certainly room to go lower, however this is the 3rd week down in a row and we don’t see a sudden change in the economy that satisfies a Bear Market right here, right now, so if this is still a Bull Market (or the end of it), the chances are that the market will bounce before reaching the WEEKLY/MONTHLY levels that are showing around 50% degree oversold, or in other words the ~2001 WEEKLY/MONTHLY area.

This should give you an idea of how much points you can make when going SHORT from these already oversold levels, don’t dream about the S&P500 at 1600, it’s not gonna happen.

If you are a die-hard short-seller, here below are the levels to go SHORT with the overbought gauges, 2054 is good enough to try an aggressive SHORT (provided the market does not make a really strong bounce, the risk is there). Higher levels like 2061.75 and upward are less risky.

>> Click here if you want to receive this analysis every day in your inbox.

Mark This Post as a Favorite
Do NOT follow this link or you will be banned from the site!