Trading the Oversold Conditions

We’ve seen up and down movement in the S&P 500 over the last 2 weeks that makes it possible to trade oversold bounces. Almost all of the down-days are oversold now. When combined with a statistically-significant move, we can trade the opposite direction (long) with roughly a 60% chance of success. So…

 

I’ll take another 2x S&P 500 long-position (Pro-shares S&P 500 Ultra, SSO) this afternoon (before the close) as long as the close will be below 2745.  A close too much above that level would not be a statistically-significant day and might have a lower probability of paying off.

 

I don’t put a huge $ amount into these trades – I‘m not a big gambler – but it looks like we may see another bounce.

 

Based on my data before the close, this does not look like a bottom. My indicators are based on closing numbers so we we’ll have a better idea this evening.