It sounds amazing after a day like today, doesn't it, but a sort I run every night on the major index components is saying just that.
Every night after the close I sort the Russell 3000, S&P 500, Nasdaq 100 and the Dow 30 by the 5 period RSI and I track the number of stocks in each index at or above RSI5 = 95 and at or below RSI5 = 5. This has proven to be a very good indication of how oversold or overbought the market is. After the huge decline today there are fewer stocks oversold than on Monday 6/23/08. I do not interpret this as a positive divergence since there was no swing low intervening these days.
There are many other indicators saying the same thing. For example, volatility is still quite low given the extent of the decline since early June, and the TRIN closed at a modest 2.02 today.
This market may be in the third wave of the decline from the May/June highs, but I expect at least a short term bottom by July 9th. The time window for the 20 week cycle low extends from June 23 to July 7 plus a 2 day allowance. Normally, this would be followed by a 4 to 8 week rally, but don't count on much this time around. The larger cycles, the 4 year and 4o week, seem to be dominating right now, which may not allow for much upside. This is the time to stay in cash or stay short until the 40 week cycle low around November 23. Experienced traders can add to short positions on rallies as long as the May/June highs are not exceeded and proper position sizing and money management is used.