Currently, the measure is sitting at -3000, which is one of the most extreme readings we've seen during the length of this rally. The chart below highlights the other instances we've hit -3000 on the indicator. While we could interpret this to mean that we should be looking for a bounce somewhere in here, and indeed that would be valid, I am watching it more closely for signs something has changed in the bigger trend. If the NDX cannot stage a decent rally (say 30-50 points) very soon off such an oversold reading, then we have a good hint that there may be trouble with the larger trend. This type of analysis can be very effective at giving early warnings of larger trend changes, so I'm paying close attention to this one.
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