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I noted yesterday that the markets were so oversold that I thought they might bounce.   At Monday’s close, 59% of the Nasdaq 100 stocks were oversold.   By Tuesday’s close this percentage fell to 39%. Now that the rebound has begun, the question is how far it will go.   No one knows.     During the most recent   market bounce, the percentage of oversold stocks fell to zero. I will watch closely to see whether this market tops out soon or develops into a sustained major up-trend.

The long and short term market trends are down.   I remain mainly in cash in my trading accounts.   Many of the stocks I follow are very oversold, suggesting that we could get a bounce.

For the first time since January, 2009, GLD has closed below its 30 week average.   This could be the beginning of a major Stage 4 down-trend. Click on weekly chart to enlarge.