Tuesday, July 20, 2004

NOTE:  This comment was originally posted 07/19/04 12:41:17 PM EST.   As you know, I very rarely comment on any technical indicators on this site.  However, I do think something interesting is that the 5-day RSI (Relative Strength Index) on the Nasdaq is now below 15.  This is quite rare historically, and shows that that index is very deeply oversold.  Obviously, oversold can become more oversold, but even during the depths of the bear market, this kind of reading came close (in time) to at least a short-term low.  I would be very wary of pressing any short positions at this time.   Our intraday measures, not based on price itself, are still not really confirming these oversold conditions, though.  As I noted in the last comment, the prevailing sentiment seems to be acceptance of the trading range, which makes it less likely the range will hold much longer.  Unless our measures begin to turn significantly, I would not be overly anxious about establishing intermediate-term positions just yet.  In the short-term, we're likely getting very close to a bounce, but longer-term I don't see a favorable risk/reward yet. 6:59:44 PM