BIG ARMS

Dick Arms is saying this morning on realmoney that this may be a pretty good time to buy. His reasons are as follows "Monday's advance, while not large, was enough to put the S&P 500 to a new multiyear high and confirm the move in the Dow. The same was seen in the Russell Midcap Index. The Nasdaq did not go to new highs, but it broke out of the downtrend of the last few weeks. All these signs pointed to a market that was starting to look better. Moreover, the Arms Index moving averages were remaining in neutral to oversold territory. Tuesday's sharp decline did not really change the above observations. A very high Arms Index value was generated, which served to push the five-day and 10-day moving averages to more oversold levels. In my last three columns, I have advised aggressive traders to take some profits, because the rise looked overdone on a short-term basis. But Tuesday quickly eliminated a large number of those sellers. I believe we are getting close to an opportunity to put on new long positions. "

He is apparently echoing my views with his oversold ARMS index observations. Many indicators are now lining up for a short term bottom.