If you look at the iShares Russell 2000 ETF (NYSEArca: IWM), you’ll notice that it’s starting to diverge away from the broader market. While some of the other major indexes trade near lower lows, the IWM maintained its composure and its lows are getting higher.
The put/call ratio — now at 1.01 — remains inflated to the put side, which means the markets are deeply oversold.
The market is mean reverting, so it can only stay at current levels for so long. When the rubber band snaps, we’re going to see a bull rally like we’ve never seen before.
A Choppy Market refers to a market condition whereby prices swing up and down considerably, either in the short term or for an extended period of time. Choppy market scenarios from day to day are generally a result of efficient market pricing.
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