We did close in Oversold territory yesterday and I think that will be the catalyst the equity bulls will need to push the SPX back to the higher end of their range. In addition to my analysis last night, the SPX had previously bounced out of Oversold territory before the closing bell; leading to more downside pressure the next day. We’ll see if the Oversold-Close is a different situation.
My quantitative levels have tightened dramatically; Overbought at 1360 and Oversold at 1348. I am more inclined to believe the Oversold than the Overbought. I think the SPX will begin to test the Overbought levels and should that happen, the range will quickly open up to the upside.