The SPX Will Continue to Move into Overbought Territory

A quick recap to yesterday:  the SPX gapped down right to my Oversold level of 1398; ultimately giving way to down to 1394.  At that point, the SPX immediately reversed course back to 1398; holding that level for a bit and struggling upward for the rest of the day.  I think yesterday’s price action was significant in showing support throughout the 1390’s structure.  While some may point to 1394 as yesterday’s key level on the downside, I would suggest 1398 was the real pivot.

Over the course of the last week, the quantitative Oversold levels have steadily risen.  Today’s Oversold level is 1399; Overbought level is 1416.  I would suggest that we are in a regime in which we will frequently move into Overbought territory, which coincides with my prediction of new yearly highs by mid-May on the SPX.  There are some economic releases today, but all eyes are on tomorrow morning’s Employment Report.

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