US stock market remains oversold.....

 US stock market has been under lot of pressure in September.

COVID-19 lack of vaccine is a factor

NO stimulus deal is another factor

US dollar getting strong is a factor

US Economy getting weaker is a factor

2nd wave of Corona Virus infection is a factor

US election is adding to uncertainty is a factor

US China trade fiasco is a factor

Oil staying near $40 is another factor

Strength of US Dollar negatively impacts other currencies, commodities 

IF we look @ all of the above, no wonder we are marking time and searching for support in US stock market.

Most of the indices are below 50 in RSI, hovering in mid 40 for most

SO..technicals are weak as every indices or sector are below 50 DMA

TAN is the only sector which near highs above 50 & 200 DMA, solar stocks are on fire...only sector which i can see bucking the trend. TAN RSI @ 64.02 which is very strong.

XLE is in deep trouble as it is below 50 & 200 DMA....even further below than 200 DMA and RSI @ unheard of 26.74.....

Market may make further progress this week as selling seems exhausted.

Major indices have staged 2 day back to back gains, which is a confirmation of reversal.

Most TV technicians are extremely bearish and are not satisfied with 11% pullback in major indices, they are positioned for 20% slump.

I personally do not see 20% total pullback under current scenario.

Economy is chugging along OK and ready to join other struggling group with quick COVID-19 test being done for masses and results within minutes, this will allow general public to feel comfortable to go in any group situation with proper distance protocol in place.

SO stay diversified, maybe there is big gains in laggards.

Good luck with your own thesis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed