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Testing - testing


Here is a test of the twilight zone. IBM (IBM) has broken down on a daily chart, but remains in deeply oversold territory. In the twilight zone, using price shouldn't be as important as using sentiment. Right now that is pretty negative. Remember a few weeks ago the charts looked great, but the markets were severely overbought so the breakouts failed. Now if the markets are in the twilight zone and sentiment is more important, the oversold level should trump the price break. One thing is for sure; the technical types are making calls around to clients about the price break.

So far this is just a test of the emergency broadcast system in the twilight zone - it is only a test. Pleased be advised that if a real emergency were to happen we would alert you accordingly. Again, this is only a test.

Also, I received an email from a reader reminding me that oversold is only useful in bull markets vs. bear markets. This is true and something I am sure the University will cover once in session. It is important to covey that I agree one hundred percent and again, my main point is where to be a seller vs. buying for a move higher. The weekly trend and intermediate-term momentum work suggests that the market has experienced the majority of its thrust higher, whereas the near-term work suggests that a bounce may still be in the cards as I said before. So far the bounce has yet to materialize.

Also important to convey is that my articles are not meant for you to make directional bets, but are meant to convey how I look at the markets, how I come to my conclusions and should only be used as information.

PS, the winner of the survey by overwhelming odds is to be more thoughtful, forgiving, compassionate and relaxed in the new year. Ok - the survey was fixed from the start!
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