Stock Indices Reach Extreme Oversold Levels

Over the past two weeks I have been alerting on the concern over the intermarket divergences and internal divergences. These always have a higher probability of predicting some type of countertrend rotation. Today’s extreme decline in the Indices has brought them to a point of being extremely oversold. This suggests the possibility of some type of pause to work off the oversold condition. How any type of rotation up develops will be important in determining whether there is more downside to come or the current move is over.

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