How Oversold?

03/03/2009 9:44 am EST

Focus: STOCKS

Thomas Aspray

, Professional Trader & Analyst

chart

The monthly chart of the Dow Industrials shows that the RSI3 hit a new low at 6.4 at the end of February. The previous extreme low was 10.2 in September 1974, just a few months before the end of that bear market. An extreme oversold reading, however, does not make a rally imminent, but does suggest we will get one eventually.

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