In the short run, however, Bespoke reports that the S&P 500 is 3 standard deviations below its 50-day moving average - a highly oversold condition. My inner trader tells me to wait for the oversold condition to clear up and watch the market reaction for signs of future direction.
Now the Technical Take reports that Rydex timers are getting excessively bearish. In addition, the latest Commitment of Traders report shows that large speculators (read: hedge funds) have moved off their crowded long in the NASDAQ 100 to a neutral reading.
Get ready for the counter-trend rally.