It Wasn’t Oversold

It was amusing, yesterday, listening to various on-air personalities try to explain why the market made such a “historic” reversal. The one I heard more than any other is that it was deeply oversold – which is just not true. It was somewhat oversold on Sep 27, but RSI made a higher low yesterday as stocks reversed and shot higher.

No, the historical rebound was all about COMP reaching support and VIX collapsing on cue – same as countless other times – with a healthy dose of short covering. Unless I miss my guess, it was only a historical headfake.

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