31 March 2008

Looking Back Over The Pig's RSI Chart for March 10 through March 28

Click on the above chart to expand it to legibility. Again, for clarity's sake, the chart shows the Relative Strength Index for the Dow 30 components, as well as some ETF's of interest. The first number in each cell is the 2-day RSI. The second number in each cell is the 14-day RSI. The 2-day RSI shows how much a stock is overbought or oversold over a very short term, whereas the 14-day RSI gives a longer-term reading. For short-term trades, I am far more interested in the statistically significant, and tradeable 2-day RSI number.

As I've mentioned before, the colors make the chart Christmas-y. They also offer visual impact, showing the market to be oversold (and greener) or overbought (and redder).

On March 10, 24 out of 30 Dow components were in deep oversold territory. Between March 18 and 25, the Dow had recovered significantly, and many cells had turned pink, if not so much overbought red. As of March 28, the markets had fallen back towards greener pastures.

I continue to hold positions in DXD, QID, and FXP, reflecting an overall negative short-term view on the market. My position in ALB, one of the Zacks Top 10 picks for 2008 is currently my only long position, and is for the longer term.

This week, I am looking for DXD to head towards $62, QID up towards $55, and FXP upwards to $115-120. As they say on Bravo, let's watch what happens.

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