Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Oversold Conditions Not Always a Friend

by December 20, 2024
December 20, 2024
Oversold Conditions Not Always a Friend

Nearly all of our charts currently show deeply oversold conditions. While this is usually a good thing, in a market downturn, it isn’t necessarily your friend. As you can guess, we believe that Wednesday’s big decline was the beginning of something more serious. But the question is, “what about oversold conditions?”

One of the Bear Market Rules that we have is this:

Oversold conditions in a bear market — “thin ice”, no solid foundation for price bounces. Bounces can be bull traps.

Now for certain, we aren’t in a bear market (yet), but we have experienced a serious decline that could lead to more. We are certainly susceptible to a bull trap. How oversold are our indicators? Here are the numbers as of the close on Thursday:

The Swenlin Trading Oscillators have reached deeply oversold territory. However, we wouldn’t get overly excited by an upside reversal. Oscillators must oscillate and they want to be on the zero line. Notice that only 7% have price above their 20-day EMA and a mere 5% of stocks have rising momentum!

The ITBM and ITVM are also oversold. They haven’t hit extremes and could accommodate more downside at this juncture. The big problem on this chart is the very few PMO BUY Signals left in the index.

Finally our Bias chart shows the oversold conditions of %Stocks > 20/50EMAs. %Stocks > 200EMA could definitely see more downside as could the Golden Cross and Silver Cross Indexes. Both of those indexes are below their signal line giving us a BEARISH Bias in the intermediate and long terms.

Conclusion: Oversold conditions are welcome in a bull market or bull market move. The market is still near all-time highs and mega-caps could continue to hold things together, but our thought is that these weak internals are coming home to roost. If not now, then January. Watch out for bull traps!

The DP Alert: Your First Stop to a Great Trade!

Before you trade any stock or ETF, you need to know the trend and condition of the market. The DP Alert gives you all you need to know with an executive summary of the market’s current trend and condition. It not only covers the market! We look at Bitcoin, Yields, Bonds, Gold, the Dollar, Gold Miners and Crude Oil! Only $50/month! Or, use our free trial to try it out for two weeks using coupon code: DPTRIAL2. Click HERE to subscribe NOW!

Learn more about DecisionPoint.com:

Watch the latest episode of the DecisionPointTrading Room on DP’s YouTube channel here!

Try us out for two weeks with a trial subscription!

Use coupon code: DPTRIAL2 Subscribe HERE!

Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2024 DecisionPoint.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

0
FacebookTwitterGoogle +Pinterest
previous post
Michelle Kam’s Blueprint for Real Estate Success
next post
Cunningham v. Baltimore County Brief: Holding Police Accountable for a Conscience-Shocking Shooting

You may also like

The Fed Talked, The Market Reacted. Think Value.

December 18, 2023

How Long Can Semiconductors Lead the Market?

March 8, 2023

Earnings, Inflation, Yield Curve & July Reset

July 6, 2023

How is the Economic Modern Family Liking Santa...

December 15, 2023

How To Invest in Value Stocks: A Turn...

January 12, 2023

Trade What You See; Profits are Waiting Beyond...

May 1, 2023

Intermediate-Term Participation Levels Are Very Overbought, and They...

December 28, 2023

The Halftime Show: Inflation Back in the Driver’s...

February 14, 2024

DeepSeek Rattles AI Stocks – Should You Buy...

February 1, 2025

Small Caps Surge Higher As S&P 500 Stalls

January 23, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Blue state Republicans threaten rebellion if Senate changes key provision in Trump’s ‘big, beautiful bill’

      June 5, 2025
    • Ricketts, Fetterman team up for crackdown on China’s attempts to purchase US farmland

      June 5, 2025
    • Hamas working to ‘sabotage’ Trump-backed aid group with ‘fake news’: Israeli official

      June 5, 2025
    • Longtime Trump loyalist flips on GOP’s ‘big, beautiful bill’

      June 5, 2025
    • Supreme Court rules Wisconsin unconstitutionally discriminated against Christian charity

      June 5, 2025
    • Trump touts ‘very positive’ breakthrough with Xi after slamming China for trade violation

      June 5, 2025

    Categories

    • Business (8,147)
    • Investing (2,008)
    • Politics (15,529)
    • Stocks (3,128)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved