$SPX Holds Key Level as $QQQ Shows Extreme Oversold
U.S. equities staged a technical rebound after extreme oversold signals triggered across key indicators.
With the S&P 500 attempting to hold a critical weekly level and Invesco QQQ Trust showing historically deep oversold readings, the recent selloff may be approaching exhaustion even as volatility remains elevated.
1. $S&P 500(.SPX)$
As the oversold McClellan Oscillator and the breach of the lower Bollinger Band suggested, price was set for a bounce today.
The index now must sustain itself above the key weekly level to validate this move.
2. $Invesco QQQ(QQQ)$
The Money Flow Index is as oversold as the 2023 correction and the 2025 bottom.
It sits BELOW COVID crash levels, exceeded only by the 2022 bear market lows. Most of the bearish move is in. $NASDAQ 100(NDX)$
Written in the Weekly Compass last Saturday:
"Bearish moves rarely occur in a straight line, we have seen that during these recent weeks; therefore, a bounce is likely for the beginning of next week.
In the unlikely event of a gap-down and continued selloff, the case actually becomes more bullish. Extreme oversold conditions often mark solid bottoms, as we saw in the previous 2024 and 2025 crashes."
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