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SPX RSI Analysis Suggests the Sky Isn’t Falling – Yet

To be kind, it’s been quite a challenging couple of months for the emotional health of all of us, including traders.

There’s been state sponsored attempted cover-up of a murder that could threaten the geo-political environment depending upon what the strong hand of the U.S. considers toward a so called “ally”, world record lottery jackpots in the U.S, pipe bombs mailed to politicians, The Twitterer in Chief going after the FED, multiple 300++ point swings (sometimes in the same day or session) in the major indices, great earnings reports that get shorted, one of the most intense hurricanes on record hitting the U.S., Brexit go and a no go then a go again and now who knows, mid-term election fiascos, apocalyptic California wildfires, and I could go on and on. Based on all the aforementioned one would think we’re heading toward the end especially with regards to the volatility in the markets. The markets are no doubt jittery with every single rally having very weak hands. There is a smell of panic mode in the air.
I’ve traded for a while now and I can still tell you that one of the hardest things to do is be calm while the masses are puking with panic. This is especially true when your analysis tells you to be looking the opposite direction of the manic herd behavior. The old saying of ‘buying when there’s blood in the streets’ is definitely easier said than done. But, if you, like me, have developed a system of what to do when these times come then you’ll be better off than the herd when all the dust settles and the hind-sighters appear saying they were with you all along.