Well yesterday was a nice change of scenery, unless you created the worlds largest social networking company (or just painted graffiti for it). It was about time we printed a positive day. As I wrote yesterday, I hate being pessimistic, but we can’t look at yesterday’s advance and assume a change in trend. It’s still Europe’s roll in the exciting game of Risk.  

I’d been looking at different signals of the market being oversold (here, here, here, and here) but I definitely wasn’t the only person looking for an oversold bounce sometime soon. Call it a dead cat bounce or an oversold rally, we are not however out of the mud yet. As Brian Lund wrote last week, we need to see more blood. A bounce to 1345-ish would not be completely out of the question after this most recent 38% retracement off the April high, but neither would a test of the recent low and/or 360 MA. Play it smart and don’t just set it and forget it with positions in this type of market environment.  

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