Time to Confront the Smoke Monster?

The market has plunged in the last month and we are oversold. Is it time to confront the smoke monster and buy?

The T2108 indicator is below 15% which has generally marked buying opportunities in the past. The red line on the plots above show when T2108 was below the threshold indicated on the left scale. The first plot shows the past two years and reveals that
T2108 < 20% has usually marked at least an intermediate term bottom. The second plot shows an eight year perspective with the threshold at 15% reducing the number of red lines.

T2108 shows that we have a good buy opportunity now, but caution is advised. Some of the prior opportunities have lead to a lower market in only a few months. See the last two months of 2007 as an example and remember what happened when Mr. Eko confronted the smoke monster.

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