Bullish on the S&P 500 (3/6/07)

Discussion in 'Trading' started by YIELDSAFE, Mar 6, 2007.

  1. Please allow me to answer your question.
    It is fairly simple to answer because it revolves around the TREND of the market.

    When a market is in a strong downtrend, it tends to stay in OVERSOLD territory. Take a look at any Bear Market or Bear Trend and you will see factual evidence supporting this observation. Lower lows and lower highs equal a downtrend, which equals an OVERSOLD condition that stays oversold.

    On the otherhand, when a market is in a strong uptrend, it tends to stay in OVERBOUGHT territory because higher highs are being made, as well as higher lows.

    In otherwords, overbought/oversold conditions are reflective of the actual TREND.

    Pretty simple.
     
    #11     Apr 2, 2007