Spotting Oversold Trading Opps & Capitulation $CPCE $VIX $SPY $VXX
Everyone has their own system for identifying buying opportunities whether they be short term trading opps or major capitulation opportunities to be long for months.
Here's a few of the measures I have found helpful over the years in chart and described.
$CPCE Equity Put/call highlighting a spike in puts over calls being bought - panic reading
$VIX:$VXV VIX Term Structure Inverts meaning investors are willing to pay UP for panic (insurance) protection even though the house is already burning. The ultimate contrarian indicator.
$BPSPX S&P Bullish Percent on point & figure buy. Sub 25 readings are highly attractive
$NAMOT Mcclellan Oscillator highlights oversold readings
$USHL5 Highs vs Lows ratio
$SPXA50R #stocks ABOVE the 50DM
$NYA200R #stocks ABOVE the 200DMA
$TRIN >2 IS PANIC SELLING
ALSO: DAILY MONEY FLOWS VIA DOW JONES. I HAVE STUDIED THESE FLOWS FOR A DECADE AND WHEN WE SEE >$1BILLION OF NET BUYING OVER A FEW DAYS OR WEEK, BEARS BETTER NOT BE TOO GREEDY AND SHORTS SHOULD BE NIMBLE. CHECK THE FLOWS ON BIG DOWN DAYS AFTER 5PM PST FOR FINAL DAY TOTALS. RECENTLY WE SAW $600M IN BUYING, NOT SURPRISED THE MARKET HAS FOUND SOME FOOTING GIVEN ALL THESE READINGS BEING OVERSOLD & FLOWS POSITIVE
