It is so refreshing to see green on the screen, and yesterday lit up the hue. But you have to put one-day moves into the proper perspective. The overbought/oversold oscillators are not a perfect investment tool, but they do help measure actual moves, and not emotional swings. So, let’s take a look at how yesterday’s action looks from both a short-term move (McClellan Oscillator) and an intermediate move (21-Day Oscillator.) As you know, we like the NASDAQ’s stats better for this than the interest rate impacted NYSE data.
The shorter-term oscillator “kissed” the oversold threshold based on Wednesday’s action, but you can see that the 21-Day Oscillator did not quite reach the halfway mark. Again, that is not something you bet the house on, but it illustrates the “healing” aspects of the mini-correction of the last few days.
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