As noted last week on Twitter, sharp oversold rallies tend to occur within the context of steep declines.
The market’s technical profile was weak before the 2018 lows were taken out and has only gotten weaker since the bearish breakdowns. Thus, it is going to take more than an oversold rally to repair the damage. The market may want to come back and retest the 2018 lows. Until proven otherwise, the concept of “what once acted as support, may now act as resistance” applies.
If we can remain disciplined and patient, bear markets often lead to excellent longer-term opportunities. This weekend’s video will provide additional insight into the recent damage and possible “where do we go from here” scenarios.