Yesterday, Capitulative Breadth moved up to 5 from 2 (with 7-10 historically marking bottoms for stocks).
The percentage of Dax stocks above the 50MA is zero, making for an oversold extreme.
Down pressure for US stocks has reached a historic extreme, which has previously led to significant bounces within a couple of days.
SP500 bullish percent over put/call ratio is down at the levels of the 2009 and 2010 corrections, but not as deep as 2011.
The message is the same: a bottom or a bounce should be close. I reiterate my expectation that leading into and around this weekend’s new moon upward pressure should emerge. So I foresee a bounce lasting into the middle of next week, and thereafter we shall see.
This weekend is also a solar eclipse, and it gives rise to a subsquent Puetz crash window, June 4 – June 13. Puetz crash windows I have previously found to be hit and miss, but wanted to put it on the radar. With a rerun of the Greek elections scheduled for June 17, some Greek citizens withdrawing deposits from banks, and Euro CDSs still climbing, there is clearly fuel for fear to overwhelm the markets. Based on recent history though, governments and central banks will intervene in any significant escalation, supporting markets. If the situation in Europe is again diffused, then positive leading indicators and a further tick up in economic surprises will likely return the fore, fuelling a period of mean reversion for pro-risk away from oversold and overbearish extremes, and out of the safe havens of treasuries and the dollar.