Stocks lower, Oil and Gold rebound from oversold levels

qqqq0819.pngStock indexes continued down today. Yesterday the S&P came back to the level of the longer term moving average, and the Nasdaq, which had been stronger, found support on the faster moving average. Last Friday I suggested that since trends and momentum were pointing up, that the path of least resistance seemed to be higher for now. But did add that some of the commodities that had been dropping and probably lending support to higher stock prices, were getting short-term oversold and could bounce. There are always two sides to every scenario, and in these markets lately, both sides can play out very quickly. After the drop in stock indexes over the last two days it appears the market decided to not take the path of least resistance. The chart on this post shows the Nasdaq etf still in an uptrend. Short-term momentum had been overbought, which was a concern for a continuation higher. Now that overbought condition has been taken care of. As long as the trend line remain positive, and oversold readings into support could provide long entry areas. The S&P, which has been the weaker market, looks less positive, as it is now sitting below both moving averages. The advance/decline ratio has weakened further. Volume increased slightly on the drop today, but still is relatively low. Crude oil, while still in a steep downtrend, did put in a minor momentum divergence, which could indicate a counter trend rally. The character of the trading in many markets is looking increasingly thin going into the last two week of August.