Frustrating day but nothing has changed

The S&P 500 has found support at the rising trend line yesterday, but can it hold?  It also closed below the 50-day moving average for the first time since late June. 


                         Chart provided courtesy of www.decisionpoint.com

Again the shortest term indicators are at extreme oversold levels, levels last seen in March and August 2004, and April of this year.  Each of those occurrences came at short term bottoms.  What is amazing is that we've reach this extreme oversold level and the S&P 500 is only 2% off its recent high. 


The 10-day ARMS index has now reached a level we saw in early July.  Back then I remember saying that I'd rather wait until this indicator moves over (or below in this case) 1.30, the typical buy signal.  It never made it and I missed the rally.  Here it is again over 1.20.


                         Chart provided courtesy of www.decisionpoint.com

I have been bearish since June and the market is finally starting to show some cracks.  If it can't rally from these extreme oversold levels than this may be more than just a correction in a bull market.  I am now in the stock funds expecting that short term bounce but if we don't get it I will step aside again as we may see that intermediate term breakdown I've been anticipating.

The dollar and oil were relatively flat.  The F fund still looks good as the safe haven fund rather than the G.  I expect that to last a week or two longer.

That's all for today.  Currently 25% C, 50% S and 25% I fund.  Thanks for reading.