Is a top in the making?
The answer is ‘yes’. We observe that major indices are overbought. Take indicators as stocks above their 50 day moving average or bullish percent indices: they are all trading in overbought territory.
Now, a top doesn’t mean necessarily a correction. Another possibility to work off this overbought condition is through consolidation and some sideways trading.
Professionals will try to bring indices further up through sector rotation.
Don’t forget: short interest is not declining for the moment, so rotation combined with earning reports will suit the bears so they can prepare another assault later on this quarter.
The answer is ‘yes’. We observe that major indices are overbought. Take indicators as stocks above their 50 day moving average or bullish percent indices: they are all trading in overbought territory.
Now, a top doesn’t mean necessarily a correction. Another possibility to work off this overbought condition is through consolidation and some sideways trading.
Professionals will try to bring indices further up through sector rotation.
Don’t forget: short interest is not declining for the moment, so rotation combined with earning reports will suit the bears so they can prepare another assault later on this quarter.
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