Oversold rally last week but downside risk still high

Heading into the start of last week the stock market was quite short (and close to medium) term oversold which was I was looking for a downside move from my last post. I did entered some leveraged long positions last Tuesday and Wednesday and got out on the strong rallies of Thursday and Friday. The two day rally was much stronger than I anticipated. Could the near medium term oversold hinted last week warrant an uptrend rally for several weeks? I am inclined to jump in on the long side but with less risky positions and limited allocation (less 20% of my portfolio with very close stop loss.) I am still worried about the downside risk due to the current overstretched 200 DMA (see last post) as the SP500, Russell 2000, and NYSE Composite indexes approach their 11th month since last touched their 200 DMA (the Dow did touch it last week and which could had launched the two day rally.) There were several cases in the last 25+ years where the stock market has gone as long as 18 months but that is very rare and pushing the extreme cases. The chart below illustrates the last time the Nasdaq was a few weeks from its 11th month without touching the 200 DMA and overstretched. This was in 2010 which the stock market crashed due to the 'Flash Crash.' The red ring/circle in the chart indicates the 11th month since last touched 200 DMA in 2010. Not that it'll happen but the government shutdown and the debt ceiling crisis concerns this week could make a good excuse despite the big rally last week.