Not Overbought

The market was overbought 3 days ago but the drop on Friday sent it back to not overbought, this has allowed the market to rally to new highs as there was supply in the market to run the price higher.

Still Overbought

The market hasn't really moved but the PI has staying in the overbought range the past 3 days.

Overbought/Short

The market is overbought at this level based on the Piker Indicator. Click on the left to see the other times it was overbought.  The purple candle marks the overbought signals.  It doesn't always mark a downturn but its close especially during these market conditions.  When the PI hits overbought under certain conditions it becomes a short signal- the market is current flashing those signals. Huge caveat here is that these signals are close to during bullish but for now follow the plan. 

Bullish Cross

On Friday the PI had a bullish cross which means the market forces are bullish at this point and the trend will be up for a few days.  The Project has the market rallying for the next couple of days and into the middle of January.  The blue arrows are the other crosses and the white are sell crosses. 

This cross mixed with our VIX study and the market possibly breaking out of a its triangle is bullish. 

Deeply Oversold

The Piker Indicator is showing a deeply oversold condition with a negative -7 reading on Thursday.  It has since moved back above negative on Friday.  But this does not happen often and is very oversold short-term.  The last time this occurred was in August, before that it was during the flash crash and one other time before the 2007-2009 bear market.  (Caveat to this data is that TOS only lets the PI go back to 2006 for the PI data, so we don't have a large sample set)

Looking at this in a historical perspective you can see that after a negative reading the market does rally but new lows have happened each time.  This would make sense with the current market conditions and my own personal theory that the market will rally into the year end but longer-term the market is not looking bullish.