For perspective, and only looking at one technical indicator, on how oversold this market is, the 7 day RSI in the SPX is now below the July ’10 and Feb/Mar ’09 market lows.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
The best way to keep money in perspective is to have some. —Louis Rukeyser
"It's the end of the world as we know it and I feel fine" say the French as consumer confidence in May rose to the highest since Nov '10 as they welcome and get excited about new Pres Hollande. Also, the French 10 yr bond yield touched the lowest on record this morning. June consumer confidence in Germany held at 5.7, just .2 pts off the highest since Mar '11. To the euro bond debate which is now taking on greater rhetoric with those with high bond yields wanting them and those with low ones saying no way, ECB member...
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August 4th, 2011 at 12:52 pm
Thanks for travelling.
Shared this with my Twitter stream.
George
August 4th, 2011 at 2:25 pm
Indicators are virtually worthless. They work everytime, until they don’t work. When they work, they get all the credit. When they fail, we blame some other factor. Just look at 2008-2009 for great examples of why RSI does not work. Others will say that you need to take many indicators into account to get a good feel for what is happening. That just means that you now have more variables which you can blame when they don’t work.
If you are going to try and use RSI, you better wait until RSI on Hourly, Daily, & Weekly charts are all pegged down at or below 20 RSI(14). Only buy a small amount and set your stop accordingly, and DO NOT CHANGE YOUR STOP regardless of the market action. Traders can easily get caught in a total emotional and mental mind-F if they start moving stops, etc. Over 15 years of daily market trading will give you a very clear view of what works and what does not.
Precision Trading Solutions via Blogspot
August 4th, 2011 at 5:32 pm
Peter,
Was wondering as to why you’d only be looking at the 7 day RSI on a daily basis or if as you said its just one data point to take note of. Certainly the weekly chart shows us nowhere near as weak yet as the Lehman and March 09 lows. Plus if the rumors are true about an Italian bank run not sure we’re done flushing out until we get something big and credible from the EU. Thanks as always for your commentary by the way. It’s rare to get an objective view out there these days.
Chris