QVMS - At The Edge Of Chaos: When This Bear Bounces Back It Should Be Spellbinding

• I recently recommended an options trade in AbbVie based on expectations that the stock could break out of its current trading range after its earnings release. The company has beaten expectations handily in Q3 while raising its full year’s guidance.
• We saw yet another new low in the New York Stock Exchange Advance Decline line last week. Yet, as we saw with Friday’s late-day rally, it’s possible that sellers are nearly exhausted. This was suggested by the decrease in the COBE SPX Volatility Index on Friday, which coincided with a rebound in NYAD and the major indexes.
• Certainly, NYAD is now well into bear market territory, having broken decisively below its 200-day moving average. And since it is well oversold, as illustrated by the RSI residing well below 30, the odds for a bounce are fairly good.

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