Custom Search

Thursday, March 5, 2009

Markets Are Now Ominously Oversold

Well, it had to happen sometime... that one green day.

As I've mentioned repeatedly equities are Extremely Oversold and only getting more so. I also warned that the really scary rinses tend to happen from deeply oversold levels. The market has been methodically grinding lower, hitting one new low after another. In fact, it's almost Boring! Without panic, you can't trust the low to be a bottom. To date, there has been No Panic Yet, No Capitulation Yet.

With only 1.4% of all stocks above their 200 day simple moving average, everything is still in probable 'crash' territory.

Friday will be the big day. Non-farm payrolls is likely to be the catalyst for a cathartic and necessary final panic liquidation down...


Leo Kolivakis said...


Correct me if I am wrong, but the last few terrible employment reports were a catalyst for major market rallies.

Also, historically, after taking a severe beating in Q1, markets rally sharply in Q2.

Are we heading towards the Mother of all bear market rallies in Q2?

Stay tuned...



Anonymous said...

ben, you shouldn't be using a log scale on that chart, 1-100% isn't log (well not in my book).

And, you'd expect a200r to bounce along the bottom in a down trend just as you'd expect it to bounce along the top in an up trend.

Basically I think you are reading this wrong. In a down trend you use this chart to find highs in a200r and sell them.

When it gets to be an up trend then you can look for the lows and buy them. But not now.

Anonymous said...


While I agree that Friday will be mostly down, don't you think at least 800,000 is already baked into the numbers?


Ben Bittrolff said...

@ Anonymous,

I use the log scale so I have room on ths chart for comments etc. I'm actually interested in the absolute values.

What I'm saying with this chart is that equities are extremely stretched to the downside, so much so that rather than expect a snap back rally (which tended to happen with a200r was a low, but at much higher levels), there is now an increased risk of a sudden "crash".

Ben Bittrolff said...

@ SS,

Baked in... perhaps. I still think it is less risky to stay short into Friday (especially after having taken profits along the way) and then wait for the market reaction to the numbers.

I am increasingly concerned that we may not make it out of these extremely oversold conditions with a classic bounce. The system is under so much stress, that this time we may actually "crash". (Defined as cascading waterfall of big down days in rapid succession.)

Anonymous said...

Wall street now the enemy of Main street: main street's destruction in Wall Street's profitable interest?

how is this good for society?

Anonymous said...


Thanks for all your help and excellent writing. I too am staying short. There are a lot of long only investors who bought into "stocks for the long run." They will only will sell with time and repeatedly lower prices, their selling will, on average with a few bounces from time to time, offset any short covering.


Anonymous said...

Ben, define "final" in your post

This is not your fathers stock market

Anonymous said...


Would you consider today a rinse? Or are we waiting for something bigger and badder?

花蓮旅遊 said...


Anonymous said...

I like your blog, it's very good!
By the way, do you like spyder down jackets, I think they are very fashionable and chic, especially the spyder ski jackets, I love them so much. In my spare time, I also like playing tennis rackets, it can keep healthy, what do you like to do?
kids north face jackets
polo vest
polo jacket
abercrombie fitch mens shirts
polo jackets for men
polo jackets for women
burberry shirts for men
polo hoodies for women
columbia jackets women
polo sweatshirts for women
north face jackets on sale
polo shirts for women
polo shirts wholesale
spyder jackets
ralph lauren polo shirt
polo pants for men
abercrombie fitch shirt
wholesale abercrombie fitch shirts
polo vests
polo jackets
polo hoodies for men
burberry shirts for women
burberry shirts on sale
polo shirts for men
north face jackets cheap
north face jackets for women
north face jackets for men
polo sweatshirts for men
columbia jackets for men
columbia jackets discount
spyder jackets for men
discount spyder jackets
cheap spyder jackets
spyder jacket
spyder jackets for women
tennis racquets
cheap tennis rackets
discount tennis rackets
tennis rackets on sale
prince tennis racquets
head tennis racquets
wilson tennis racquets
babolat tennis racquets

replica rolex said...

$75 Replica Rolex Watches sale, Our site provides Rolex replica, replica Rolex Watches, replica breitling, replica Cartier, replica Omega, Tag Heuer Watches. . .more than 100 famous rolex brands"
rolex air king
rolex datejust
rolex day date
rolex daytona
rolex gmt
rolex submariner
rolex yachtmaster
a lange sohne watches
alain silberstein watches
bell ross watches
breguet watches
breitling watches
bvlgari watches
cartier watches
omega watches
patek philippe watches