Make or Brake Time

The Russell 2000 is down 6% from the 3/27/2012  high, down 5 days in a row, RSI2 of 1.32,  and today is the second consecutive day that it is trading  below its lower bollinger band.  According to Telechart Mc Oscillator we are extremely oversold, we have a reading of -376 as I write this.  The last time we had such a negative reading was on 11/23/2011, that led to a decent bounce in the days ahead.  Bottom line; it rarely pays to push on the sell side and or short side when we are this oversold.   What we want to see now is the leaders that have held up well take a hit, so far PCLN is $23 off this mornings high and AAPL is off $12 from today’s high.  Selling in the leaders will probably spook out some stubborn bulls late in the sell off.

Irregardless of what is going on around the world, once you get this extreme in the  McClellan Oscillator you normally get some type of relief from the selling 1-3 days out.

Russell 2000 should find some support at around 780

Positions: 0 stocks, started a flyer in TNA due to the oversold nature of this market.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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