Based on the indicator T2106, the McClellan Oscillator, the market is more oversold than it has been in a while.
Readings of -200 are considered oversold, and they rarely happen. Yesterday we clocked a reading of -273.
The chart below shows the recent dates where we had -200+ readings on the McClellan Oscillator.
Here is the SPY chart when annotated with the dates above.
We have all heard the saying; oversold can become more oversold. That is true, but we are in a game of probabilities. And the probabilities favor a short-term bounce before new lows are made.
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