From an intermediate term TREND perspective, this remains a bear market (1144 = TREND resistance in the chart below).
That said, all bull and bear markets get overbought/oversold on an immediate term TRADE basis. Its our risk management task to plant and prune our positions with overbought/oversold levels in mind.
We just covered our short position in the Dow (DIA) because we see any price in the SP500 at or below the immediate term TRADE line of 1077 as a good spot to cover some shorts. In other words, 1077 is the immediate term oversold line.
There is nothing about US economic growth expectations that we consider appropriately built into the powers that be of American consensus yet. That said, consensus meets reality over time where it matters – on the tape.
Give this bear market time. It finally has the bulls squirming.
Keith R. McCullough
Chief Executive Officer