Since peaking last Tuesday (1/22) at 3,338 (ATH), the S&P 500 has tumbled with two ugly back-to-back days, with equity markets now down 3% from ATH. While the sell-off is a mere two days, the velocity of the decline has pushed markets into oversold territory.
POINT: The TINA “put” comes into play if 30min RSI (14-period) <30 — has been a “money” trade in all of 2019…
The 30min RSI (14-period) is now oversold at <30 (see below) and the last 4 times this happened, it was a profitable entry point. In fact, this was true in the last 10 instances (from June 2019).
– As long as investors remain too long “cash,” these pullbacks are bought. Think of it as TINA (there is no alternative) “put”
– And the TINA “put” is still in effect, as long as the Fed remains “easy” (check, yes) and yields are low (check, yes).