NEW YORK (TheStreet) --The U.S. stock market saw some intense selling early on Thursday.
The DJIA was down nearly 180 points at the open before recovering at the end of the day. The DJIA lost 70.54 points to finish at 16915 while the S&P 500 was down 8.15 to close at 1964.68. The Nasdaq was lower by 22.83 and the Russell 2000 was down 11.95 at 1161.86.
Since last Thursday, the Russell 2000 has lost 3.86%. The Russell is now in "Trend Bearish" territory again, according to my algorithm process. That is a three-month or longer time frame.
The Nasdaq is down 2% from last Thursday followed by the S&P down 1% and the DJIA down 0.89%.
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A distinguishing feature of Thursday's selloff was the volume. It was close to 100 million shares traded in the S&P 500 Trust Series ETF
. As I have mentioned on numerous occasions, the down volume days greatly exceeds the up volume days.
One important fact is the Russell 2000 index is now in oversold territory. That is the first time the index has been oversold since May 8, according to my process. What this means is that I am now trading from the long or buy side of this market.
I have not done that since the end of May. Having a decent selloff creates buying opportunities. Chasing the technology momentum stocks may work in the short term but the amount of risk in playing that game is to great.
I would rather use my internal signals to buy low and sell high to the momentum chasers.
If the DJIA, Nasdaq and S&P can open down or in the red on Friday, all the major indexes will be in oversold territory. This will be the first time for the S&P and DJIA indexes since April 11 in oversold territory. That is a long time.
With a red open on Friday the Nasdaq will be in oversold territory for the first time since March 28. Does anyone think we are or were in a bubble?
There are many geopolitical headwinds for this stock market. Pay attention and have a risk management process that is repeatable and accurate.
I will be hosting an open chat tomorrow at www.strategicstocktrade.com
. Feel free to join us and find out how we have had a nearly 95% success rate over the past year.
At the close of trading on Thursday, I sold some of my long position in S&P Goldman Sachs Crude Oil Trust ETN
for a nice gain. I also opened new long positions in MBIA
, and WhiteWave Foods
. All three stocks are extremely oversold.
At the time of publication the author was long OIL, COP, MBI and WWAV.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.