Markets Getting Oversold
01/26/2010 9:29 am EST
The rebound on Monday was anemic, and given the declines in overseas markets, we expect more selling on Tuesday. The NYSE Composite is testing trend line support with minor Fibonacci support at 6700, about 4% below Monday’s close. The rising 200-day MA comes in at 6500, which is about 7% lower. The McClellan Oscillator tried to turn up yesterday, and at -194, it is approaching oversold levels. Last fall, the market rebounded from similar levels, but the Oscillator is likely to go lower this time, possibly to -300.