U.S. stock futures traded lower this morning with the S&P 500 poised to fall back into bear market territory following the worst week on Wall Street since January — and more in Monday's stock market recap.
What I find interesting is that the DIA, which tracks 30 large-cap Dow stocks, is trading near its previous lows and that its relative strength index is overdone.
It looks like there’s a good chance the market could rally today because stocks tend to make their lows into Monday morning, but then turn around and peak out by the afternoon. In other words, we usually see the end of the week turnaround from the previous week on Monday…
So it wouldn’t surprise me if we experience a nice reversal because we’re gapping down quite a bit...
The put/call ratio is at 1.20, which means the market is bearish because traders are buying more puts than calls. The bottom line is that the market is grossly oversold right now, which means the best option for us is more upside over the next few trading days.
In this morning’s stock market recap video, I’ll also give you an update on momentum levels… where there’s technical upside potential… the best day of the week to go long… an update on volatility and what it means for stocks… the best and worst sectors to trade right now… the biggest report coming out this week… and big signs to pay attention to at the moment.
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