The indexes certainly appeared as if they might be in position for some kind of reaction rally as of last Friday’s close. But, despite the oversold condition of the indexes and many leading stocks, oversold simply became more oversold. Most of these price breaks are something to behold, to be sure. Leading stocks in most cases haven’t even been able to hold undercut & rally moves as they have trended lower this week.
The NASDAQ Composite Index was in position for an undercut & rally move after undercutting the mid-August low last Friday, but that fell short with a lower closing low on Monday. A brief rally yesterday ended with a full reversal back to the opening levels and the bottom of the daily price range. In my Tuesday video report, I noted the bearish tone of this action.
That quickly came to fruition today as the index sliced through its 200-dma on heavy selling volume. It is now testing the 7419.56 low of June 28th . While things are really starting to get oversold, it’s difficult to say that the indexes have reached a potential low point. At the very least I’d need to see an undercut & rally move back up through that late-June low, and that hasn’t happened yet.
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