Doing a quick check here on my favorite S&P Oscillator (favorite because it’s free) it looks like the slightly overbought condition we were experiencing has been relieved.  As you can see the oscillator has pulled back which, although it feels terrible, is actually a good thing.  With the Fannie/Freddie news that came out today we can probably expect to see a fairly decent sized rally in some of the financials that could go on for several days rallying the S&P 500.  I’ll be keeping an eye on this indicator, when it start getting back up towards 80, that’s when you want to start selling into rallies.  For now, I THINK we’re going to enjoy a bit of a rally for the next few days.

S&P Oscillator

S&P Oscillator