So many of the indicators are telling us it is about time to get invested.  The one indicator that I follow that is not confirming a buy right now is that 10-day ARMs index I talked about the other day.  Otherwise the overbought/oversold indicator, the put/call options ratio, McClellan Oscillator, sentiment surveys, etc. are deep into a buy zone. 

Basically we're at a point where we either recover, or we get a little crash.  I don't believe the 3 legs of the market (psychology, valuation, and monetary conditions) are weak enough to see a crash but you never know.  The odds are favoring a rebound. 

Here is the current overbought/oversold indicator.  It is hitting levels not seen very often.  Only one other time in the past 2 1/2 years. 



                          Chart provided courtesy of www.decisionpoint.com

One thing I worry about is the seasonality data of late March.  The last few days in March are very negative historically.  I went back over the last several years and late March does mediocre at best.  The few days leading up to the last week are OK.  It is that last week that gives me pause.  The likely reason is that it is smack in the middle of earnings warnings season.  


                              Chart provided courtesy of www.sentimentrader.com

If the market is going to play out in a similar fashion to last year, you buy the dips and sell the rallies or buy oversold conditions and sell overbought conditions.  So I'm not saying the market going to shoot up 20% when we see a rebound.  More like 4% to 6% moves chopping up and down.  The S&P is now down 4.7% in the last 3 weeks.

If the market is selling off big time (1% or more) again before the deadline Wednesday, I will seriously consider moving into 100% C fund.  As I mentioned the other day, the initial reaction to the Fed meetings is usually reversed within days of the meeting.  I don't want to get too aggressive unless it is obviously a blow off, sell off.  1% would do that for me though.  If we are only down a couple of points it may mean we will just grind down lower and slower.  I'd rather see the capitulation.

Another thing that can happen is the market could rally in the morning.  But buying a rally would be a bit more tricky.  I'd prefer to see it fall hard first, then rally.  That may be something to look for.  Just an up opening could be a trap however.  Stay tuned.
                         
That's all for today.  Currently 40% G, 60% C fund.  See you tomorrow.