chart: S&P500 daily

The yellow lines indicate where the market was oversold and in a potential buy area since 2012.  We are currently in one of those areas now. 
Note that in approximately June 2012 the market did re test the bottom and it did make a new lower low.  So, don't rule out the possibility of that happening this time too.  It is not necessary but it certainly can happen.
On September 6th a few charts from Chaikin Analytics were posted and they were short term overbought.  When they become oversold again and probably that "may" happen in the next 1, 2 or 3 weeks as September is the weakest month of the year, we will then be entering a more favorable time of the year and this could bring in a year end rally that the intermediate term cycles have been suggesting.
Do NOT forget the major sell signal posted on September 4th.  The monthly and weekly charts do not move fast like the daily chart and when we get overbought again on the daily chart it is unlikely that the monthly and weekly charts will reverse trend and give a buy signal.  As long as the they are both still on a sell signal, the next time the daily chart is in an overbought area and gives a sell signal there is always the possibly of much more downside volatility.  If not the first time it is over bought then surely the time after that, as time will be running out with the bull.


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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results