Hitting extremes on oversold readings

Some of the technical indicators we follow at are now hitting rarely seen oversold levels. Accordingly, we have begun to put some of our cash hoard to work . We have taken a 33% postion in the US stock index ETF's up from 100% cash. Our main concern remains the stability of the European banks, and we continue to follow the situation closely. Currently the fears of European contaigon look overblown, but fear has a way of spreading quickly as we saw in the financial meltdown of 2008 that begun with the fall of Lehman and Bear Stearns. We will keep this in mind and if the technical levels of support are breached we will look to reduce exposure. We are currently looking for the 1040 area on the S&P 500 to hold (the Febuary lows). If we break those levels on a closing basis we may look to lighten exposure , but currently the rewards outweigh the risks of not having some exposure to this market at these oversold extremes.