As promised, I'm back at work here after an amazing family break. More on this soon. As for last week, some large ranging Lehman and Oil induced red bars there. Ironic as my last post title noted fear dissipation! And now Oil is nearly at $140 a barrel -- amazing! If one were to look at just the last two months of trading, one may conclude we have just seen a head-and-shoulders top set up to retest the year's lows. Not a prediction, just and observation.
Although Asia finished strong, today may certainly be tough with oil again, as already seen in the A.M. and especially after last Friday's minor recovery attempt. In this regard, keep a close eye on the oil ETF (USO) as a real-time contrarian proxie.
Below is a chart of the S&P 500s 5-day and 2-day past relative strength indications reading left to right. I often find it helpful to look at extreme reading of these shorter time frames when considering immediate overbought/ oversold conditions as compared to the "traditional" 14-day window.