Carnage in markets today as the previous October lows are being retested and new lows at key levels may well be in the offing as discussed in the Weekly Market Update.

But there’s a glimmer of hope here for bulls, at least in the short term.

One signal chart is flashing a historical sign that a bounce of size is coming. Whether from here or from new lows and that is $BPSPX. Specifically its RSI has reached the 7 zone which is pretty oversold.

What happens when $BPSPX RSI hits the sub 9 level?

See below:

It’s an area that has invited larger bounces before new lows or even key bottom especially if it hits the 5-6 area. So it’s a key chart to watch.

What happens then after the next big bounce, once a bottom is found here, then of course is then critical to the future of this market as discussed in New Highs or Bust.

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Authored by: Sven Henrich