Oversold Bounce Almost Complete
Early this morning the DOW was down well over 100 points. I saw a lot of underlying strength in the markets using my proprietary software. I saw strength in SPY (S&P500 ETF), QQQ (NASDAQ 100 ETF) and DIA (DOW ETF). The DOW closed only down-11 and the NASDAQ was up for the day for the third day in a row. The market has worked off the oversold condition and I do believe there are gaps below the market. As I stated I am 75-80% certain we have seen lows for the year, but I do expect some backing and filling of the 2 gaps below the market. I expect an advance sometime between the late third quarter and early 4th quarter with the market somewhere slightly negative or up on the year but nothing near the declines that we have had recently.
Crude oil was up about 2.50 today. There were some rumors Saudi Arabia went into Yemen and oil spiked up. In next few weeks I see 38 as the bottom, I am looking for a pullback in oil to go long for a trade.
As I stated yesterday I saw gold having a positive divergence between the daily and weekly charts. The stochastics on the daily charts being oversold with the stochastics on the weekly charts turning up. Gold was up 13-14 dollars. I am not a raging bull on gold. If gold pops up anywhere near 1160-1180 I would be looking to sell gold and any gold stocks or ETFs. Gold is going to be in a range 1070-118. I don’t see gold getting above 1200 and I would be looking to sell on any rally into that number.