By How Much Is The Market Oversold Right Now?

Discussion in 'Trading' started by shortie, Jun 12, 2011.

How Would You Characterize This Oversold Market?

  1. Happens every ~2 months

    2 vote(s)
  2. Happens ~3-4 times per year

    8 vote(s)
  3. Happens ~1-2 times per year

    16 vote(s)
  4. Happens once every ~1-2 years

    2 vote(s)
  5. Happens once every ~3-4 years

    9 vote(s)
  1. By some measures the market is very oversold. For example it has not had 6 down weeks since 2002. But in % terms the decline is very modest. The market is still Positive for the year.

    VIX has not spiked much above 18 recently, so there is not outright panic that accompanies serious market declines. But the pessimism in financial articles is quiet prominent.
  2. to clarify:
    by "oversold" i don't mean the simple % away from the recent high or a moving average. one can easily calculate those numbers and compare with historical sell-off. my question is more about the extent of the move away from what's "fair" right now. in other words, my question is about the probability of a reversal right now. the answer to this question probably needs integration of various measures besides the price change such as market sentiment.

    I note that total call/put ratio (5d MA) stands at the level last seen in May 2010! There is a disconnect between this and VIX ~18. Strange!
  3. The NASDAQ is cheap relative to earnings . That's all I got
  4. don't you mean how overbought is the market? welcome to the new bear. don't fight the bond market.
  5. i see that TLT is up 11% since Feb 2011. this appears to be a lot for bonds and actually suggests that the bonds may reverse at least short-term. did not Pimco dude sell his bonds? he must know what he is doing.
  6. riddler


    the naz is cheap???? it appears so but remember this; if earnings estimates some down, the naz will be rather expensive. thats what causes big sell offs.
  7. Key equity index downtrend on daily charts strengthens. Weekly
    charts are bearish to neutral. I expect the overdue equity
    correction to gain considerable momentum.

    EURUSD downtrend and USD uptrend continues but EURUSD currently oversold and USD overbought.

    USDCHF ~ consolidation continued for longer than expected however daily chart bullish signals have now strengthened and further upside expected.

    Ignore the emotional pseudo trader trolls - longs be careful.
  8. most volume is coming from treasury markets, stock index hardly has any meaningful volume. my guess, yield is going flat or lower, market will keep sliding, how low, I don't know.

    Once the debt ceiling raised again, the yield will go up, then stock market may revers this down trend. Until then, stay short. :D
  9. for the past few days the market has been oversold yet it refuses to rally. when the markets does the opposite of what everyone expects (and everyone expected it to rally) look for a HUGE move in the other direction no matter how improbable. the person who mentioned the disconnect b/w the vix and the spx is dead on. this will be resolved one way or the other. my guess is that the vix will rally huge. here's my prediction for the next week so take it for what it's worth (npv less than .02 prob): the spx hits 1250 at some point this week and the vix finally breaks out as people sense this is no ordinary pullback.
    #10     Jun 13, 2011