That sinking feeling continued for our momentum indicators, but there are signs that we are nearing at least the short term bottom of this down draft.
Our Slow Momentum Indicator is just barely hanging on to Neutral waters, and barring a huge rally today will like fall into the red after today. The big question now is how long we will remain in the turbulent waters. We see that our Fast Momentum indicator almost flattened out yesterday and if the pre-market rally holds it will turn up at the end of today. The Moderate Momentum Indicator is WAY oversold, particularly when you look at the major indexes alone. This all signals a short term rally.
We will watch closely if this downdraft was just a correction of the bull move off the March lows to the May high, or the end of the correction of the bear move from the October highs to the March low. For the bull argument, I am watching for a day when we hold a rally and end near the days highs.
Once again, if you want to play the long side, be a quick hitter until the new trend is clear.
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