Dangerously Oversold, Again

As we discussed last August in real-time, markets which remains persistently oversold and do not bounce when they seemingly "should" bounce tend to be uniquely dangerous. In my estimation, the rally last October sugarcoated much of the pain from that lesson, but there are times when the market fails to recover with anywhere close to as much vigor from a selling swoon like we saw back then. 

In the current market, all major indices are below their lower daily Bollinger Bands, and have been for much of the new (and very young) year. 

But if bulls do not show up soon, amid the likely overnight fireworks in China, and energy and energy stocks still weak, I suspect the dangerously oversold condition to flex its might more forcefully than even bears are thinking. 

From a trading perspective, we a covered a GOOGL short earlier inside Market Chess Subscription Services for discipline. But, again, bulls fumbled an excellent bounce opportunity over the last hour or so and the they need to regroup into the bell again. 

The bottom line is that the market is now looking out a binary outcome, in all likelihood, with the risk of a wipeout or violent snapback rally. 

More on this after the bell in my video market recap for Members, and the brief one here.