Overall Market Severely Oversold on Daily Charts
Today was another down day in the market. The weakness in the market is a result of the fear that the Federal Reserve will raise interest rates in November and/or December. I currently have a significant oversold condition on the daily charts and I am looking for a 200-300 point push up from here. I am looking to buy names such as MSFT, SSO, and QQQ which are very oversold here. I believe there is a good opportunity here for a rally from this oversold condition. The markets are extremely oversold on the daily charts and I am looking for a move back up, where I think the S&Ps could get back up to the 2050-2065 range.
The oil inventory number yesterday was very heavy, coming in at 4.2 million barrels. I stated that if oil closes below the 41.74 level today, I would have a sell signal for oil on the weekly charts. Oil is currently trading around the 40.80 level so there is a good chance that the weekly chart will go negative. If oil closes below the 41.74 level I would have a sell signal on both the daily and weekly chart and I would be looking to short any bounce as I believe oil could trade down to the mid to upper 30s. For those of you who use heating oil I would wait to lock in until oil trades down to the 35-38 range at which heating oil could have traded down 5-6 cents from here.
Gold is now trading at 1080. Gold traded down to 1073 yesterday before pushing back up. The print low for gold for the year is 1072.30. Gold is in no man’s land. I am waiting for a bounce in gold.