Time to buy. 100% S
Why I'm Buying Stocks Right Now... And You Should, Too
Take a look at this updated chart of the S&P 500 plotted along with its
Bollinger Bands...
The S&P 500 closed Tuesday right on the support line of the
rising-channel pattern. So this is a logical area at which to expect some sort
of bounce to develop.
Notice also, though, that the index closed below its lower Bollinger
Band.
Bollinger Bands measure the most likely trading range for a stock or an
index. Any time an index moves outside of its Bollinger Bands, it indicates an
extreme move – one that is likely to reverse.
The last time the S&P closed below its lower Bollinger Band was in
mid-December – right before the start of the "Santa Claus" rally.
Now, take a look at this chart of the NYSE McClellan Oscillator (the
"NYMO") – a measure of overbought and oversold conditions...
A reading of more than 60 on the NYMO points to overbought conditions and
often marks the end of a rally in the market. A reading of less than -60 points
to oversold conditions and often marks the end of a downtrend in the
market.
The NYMO closed at -60 on Tuesday.
That's not as oversold as conditions were in December. But it's oversold
enough to look for the end of the current decline phase and anticipate a new
rally phase.
Why I'm Buying Stocks Right Now... And You Should, Too