Taking The First Step:

There are a myriad of ways that investors look at sentiment for clues to see if the market is getting oversold. Of course, PRICE should be the one sole motivator, but there are a few extreme readings on some measures. CNN’s Fear & Greed Index 2008 at the height of the financial crisis sank to 12. Tuesday it hit 13. As of yesterday’s CLOSE on the Nasdaq, just 16% of the components are trading above their 200 day moving average. Below we take a look at the VIX and the instrument has been having issues in the upper 30s. A CLOSE above 38 would be a big signal that the bottom is NOT in, but a move back toward the round 30 number could scare some bears and have them running for cover. The time to start dipping one’s toes into the water slowly here with tech stocks that have shrugged off the relentless selling could be a good place to start. Do NOT average down, as losses can get out of hand quickly, but names that are breaking above former resistance or have been holding key levels could be slowly waded into. Remember on the long side with tech treat any moves tactically, meaning book 5-10% gains as the market is still treading on shaky ground. 

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