I encourage anyone who’s ever wanted to gain access to Exodus to do so now. Click on that link and sign up for a free trial.
Here’s the data. We’re oversold for 12 of the past 14 trading days — a new record. Mind you, these algorithms were measuring fear dating back to 2008. This is worse than those spates of downside pin action.
The lowest score we have on record occurred on 5/6/10 — the date of the flash crash. I remember it well, having been under a general anesthetic for an endoscopy. I had an astounding 25% of my book in VIX and ended up making $5 million on the ordeal. My play was for the lows to be retested and they soon were achieved. As a matter of fact, markets did not recover until October of 2010, a full 5 months after the crash.
After the lowest score was hit, prices dropped again, but quickly recovered. However, the rally was short term and new lows were quickly endured.
On purely a technical basis, this is the 7th lowest score. The first occurred on 9/22/11.
Look below and bear witness to the price action after that OS signal. It was a tepid bounce, followed by more selling. However, in a little less than two weeks from that date, markets had taken off to the upside again.
Bottom line: The selling isn’t done yet. When we bounce, based on historical precedence, you should probably look to fade it.
If you enjoy the content at iBankCoin, please follow us on Twitter
The rent and gas is too high to make payments on the 10yr. auto loan nor the subprime jumbo home loan. But can still get recreational weed as it’s half the price two years ago.
I remember the Flash Crash too. I was tweeting to Scott B about how the market always spikes either really down or up about the time Jim Cramer is doing a short segment on cnbc..then it really dropped. I was so happy that it really spiked down and didn’t even realize how important the drop was. Lol, I always wonder if the Algos were tracking tweeter feeds and we caused the flash crash. lol.
What kind of endoscopy (if I may be so bold)?
I may be undergoing one, although there is a low chance of success. I had oral surgery last year and he screwed up nicking (and the resulting scarring) my submandibular gland and thus have lost a fair amount of my saliva… which leads to other problems.