24/9/22. Overnight in America. Stocks fall again. "How low can...

24/9/22. Overnight in America. Stocks fall again. "How low can you go?"

Dow Jones -1.62%. SP500 -1.72%. Nasdaq -1.8%. Small Caps -2.23%. Banks -1.97%.

SP500.

SP500 is now extremely oversold with an RSI at 28.9. Rarely does a major index show such a low reading without bouncing to the upside. Of course, oversold can always go more oversold, so don't jump the gun. A more by Stochastic back above the oversold zone (below 20) would be a "get set" signal.

The risk to the upside is now much better than the risk to the downside. Traders will do well here.

Any move to the upside will likely be sold into.

Below is a six-month chart for SP500:

I've added this chart because we can see that SP500 is now down, more or less, to the June low. That's an important support level. Give the extremely oversold nature of SP500, that reinforces the idea that the Index is poised for a move to the upside.

Commodities.

Commodities had huge falls last night. Commodities Index -3.39%. Energy -4.09%. Base Metals -2.58%. Agriculture -1.94%. Gold -1.73%.

Commodities are generally very oversold with RSIs down in the low 30s. Look for a rebound in the next few days.

Yesterday in Australia.

XJO fell heavily on Friday -1.87%. RSI is at 34.58, so not as oversold as SP500, but that could change on Monday.

The Index is opposite a congestion zone from July which might offer support. If America does revert to the upside, we should follow suit.

Bitcoin.

In week-end trading, Bitcoin is up +1.73%, but the chart remains in bearish territory.

Positive divergences on indicators suggest that Bitcoin could stage a counter-trend rally. Nimble traders could benefit from such a move.