John Hampson's Update: Percentage
of stocks above the 50MA shows how extreme oversold we just reached,
but again from that kind of level we have previously seen v-bounces or
more extended basing, lasting from a couple of weeks to a couple of
months.
Source: IndexIndicators
But
hopefully the message is clear: from such extreme readings in Nymo, %
stocks above 50MA and CBI (which hit 11 on Friday), the nominal bottom
was close.
My
models show downward pressure into the end of next week. What happens
the last couple of days of this week I therefore consider to be key. If
stocks can rally further away from their lows then I would expect Euro
and oil to reverse and join them and for a v-bounce low to be happening,
with some consolidation only into the end of next week. If pro-risk
alternatively falls and takes out last week's lows then I will be
looking to attack on the buy side again once we see the Nymo divergence
and that would most likely after the end of next week once positive
pressure emerges.