I wish I knew how this slow motion crash was going to end.
Right now, it is fascinating to watch the price action, feel the emotion and see the behavior.
The ridiculous ‘oversold’ readings continue with the highest put to call ratio since the flash crash in 2011:
The high Put/Call ratio means simply that a ton of puts were bought versus calls. The premium that people are paying for protection sure looks like panic:
Even with all this I am just probing with some buys and nibbling because oversold can become more oversold.
Be careful about relying on oversold indicators as your investing or trading guide because as Mark Minervini points out:
Oversold is a very dangerous condition if relied upon incorrectly. Keep in mind, all the biggest meltdowns in market history STARTED from extremely oversold conditions.
All these ‘oversold’ readings mean a few things. A bounce is coming (timing it is just a game I like to play). Too many trends are broken from this crash so I highly doubt a bounce becomes a new uptrend. Most importantly, with emotions so high and stocks so broken, it will take a lot of time to heal and build bases for a meaningful next leg higher.
Be patient. This is one shitty market.
Also published on Medium.