The New York Summation Index ($NYSI), after a couple of years has finally hit the -500 mark. That is an extremely oversold reading. The $NYSI is a long term indicator, that gauges the health of the market in terms of who is in charge (Bears or Bulls). The -500 mark is significant as it indicates two possible scenarios. The first is the Market could be starting the first phase of a bear market. The second scenario, is the Market has finally worked off the overbought conditions due to the incredible bull run over the last few years and is ready to go back up. The second scenario implies that the Market is likely in the process of forming a long term bottom.
In terms of past Market behavior, the second scenario is more likely. The chart below shows within the last 5 years, the $NYSI has only been below -500 two times. Both times ended up being long term buying opportunities. Unless we hit a recession, it hard to believe we are starting another bear market.