Brimming With Confusion

What is going on here?  After Monday's session, it looked as if the market was oversold, based on the Arms Index moving averages -- the action seemed to tell us a brief rally was due and likely very soon. We did see a rally, but a feeble one, on Tuesday. That's fine. It's what we were expecting.

But then, on Tuesday, the sellers kicked back in -- yet the Arms Index numbers were very bullish, for both the NYSE and the Nasdaq, all day long. In other words, we were seeing no fear in spite of the decline. But the bullish Arms Index numbers make it look as though the oversold reading is being erased without a commensurate rally. That is disturbing, and I believe it reflects a very negative underlying condition. Consequently, I continue to suggest holding short positions established on the highs of the cycle two weeks ago....333 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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