Friday’s selloff obviously relieved any overbought conditions that may have persisted, so before the Monday open here are some Reversal Readings we’re keeping an eye on. Remember that we consider any reading above 95 to be well overbought and any reading under 5 very oversold.
XLF - Financials - 0.39
EWA - Australia - 0.65
EWZ - Brazil - 6.22
IYR - Real Estate - 0.53
XLI - Industrials - 3.4
PHO - Water - 9.1
We already have a small bonus trade position in the financials and may add to it in the morning.
We’re tempted to make some general market comments, but you know what? There’s really not much to say except that the 1326 level on the SPX seems pretty important if the bulls want to have any kind of real bear market rally.