Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Least Overbought Market In A Month

TedTed
edited March 2017 in The Bullpen
FYI: The chart below is from today’s Morning Lineup, and shows where the S&P 500 is trading relative to its trading range. When the blue line is in the red zones, it indicates that the S&P 500 is trading at short-term overbought levels (pink=between one and two standard deviations above the 50-day moving average (DMA), while dark red = S&P 500 is more than two standard deviations above its 50-DMA). Conversely, when the line is in the green zones, the market is short-term oversold (light green=between one and two standard deviations below the 50-DMA, while dark green = S&P 500 is more than two standard deviations below its 50-DMA). After reaching levels well into ‘extreme’ overbought territory in the last few weeks, the S&P 500 has been working its way down to less overbought levels as the market trades sideways and its moving averages and trading ranges play catch up. As of mid-day today, the S&P 500 is still trading at short-term overbought levels, but the degree to which it is overbought is the lowest in a month. While this doesn’t suggest that the market is trading at attractive levels from a timing perspective, it illustrates a fact that we have cited numerous times in the past and that is that just because a market is overbought doesn’t necessarily mean that it has to sell-off in order to work off the overbought condition. Corrections can occur in both price and time.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/least-overbought-market-in-a-month/
Sign In or Register to comment.